Homework: Chapter 24 Homework Save Score: 0.05 of 1 pt 3 of 4 (3 complete) HW Score: 50.53%, 2.02 of 4 pts P24-27A (similar to) Question Help 0 Sawyer Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system would be beneficial: (Click the icon to view the information.) Read the requirements. Requirement 1. Sawyer's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $140.00 per machine hour. Compute the total indirect costs allocated to the commercial containers and to the travel packs under the original system. Then compute the indirect cost per unit for each product. Round to two decimal places. Select the formula, and then enter the amounts to compute the indirect cost per unit for each product. (Abbreviation us Number of units Data Table Allocated mfg. OH cost 343,000.00 = Indirect cost per unit = S 98.00 $ 3,500 Commercial containers Travel packs Estimated Estimated Quantity of Allocation Base Requirements 24.000 kilos Activity Materials handling Packaging Quality assurance Indirect Costs Allocation Base $ 96,000 Number of kilos 210,000 Number of machine hours 114,000 Number of samples $ 420,000 3,000 hours 1,900 samples Total indirect costs Actual production information includes the following: 1. Sawyer's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $140.00 per machine hour. Compute the total indirect costs allocated to the commercial containers and to the travel packs under the original system. Then compute the indirect cost per unit for each product. Round to two decimal places. 2. Compute the predetermined overhead allocation rate for each activity. 3. Use the predetermined overhead allocation rates to compute the activity-based costs per unit of the commercial containers and the travel packs. Round to two decimal places. (Hint: First compute the total activity-based costs allocated to each product line, and then compute the cost per unit.) 4. Compare the indirect activity-based costs per unit to the indirect costs per unit from the traditional system. How have the unit costs changed? Explain why the costs changed. Commercial Containers Travel Packs 3,500 containers 51,000 packs 10,200 14,000 Units produced Weight in kilos Machine hours Number of samples 2.450 510 All 700 765