iRobot wants to reallocate the existing overhead costs to products using recently collected information with respect to key activities and activity cost drivers They have the following three activities and other information Total Activity Activity Costs Costs (000's) Assembling Components $36,000 Setup Production Line $15,000 Repair Machines $7,000 Additional Information about Production Total Roomba 690 Roomba 614 Number of Production Runs 1,000 750 250 Number of Setup Hours 8,000 5,000 3,000 Number of Machine Hours 35,000 25,000 10,000 Number of Hourly Employees 160 40 120 Apple has learned the following The cost of assembling components is incurred each time a new production run occurs The cost seems unrelated to the number of components within each batch The cost of setting up the machine varies depending on the product and specific production run The cost seems to relate to the time it takes to setup the machine iRobot has to repair the machines routinely based on the hours that the machine is being used Compute the amount of overhead cost allocated to each product and the profitability of each product using the activity based costing approach

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iRobot wants to reallocate the existing overhead costs to products using recently collected information with respect to key activities and activity cost drivers.They have the

iRobot wants to reallocate the existing overhead costs to products using recently collected information with respect to key activities and activity cost drivers.They have the following three activities and other information

Total Activity

Activity Costs

Costs (000's)

Assembling Components

$36,000

Setup Production Line

$15,000

Repair Machines

$7,000

Additional Information about Production

Total

Roomba 690

Roomba 614

Number of Production Runs

1,000

750

250

Number of Setup Hours

8,000

5,000

3,000

Number of Machine Hours

35,000

25,000

10,000

Number of Hourly Employees

160

120

Apple has learned the following:

The cost of assembling components is incurred each time a new production run occurs.The cost seems unrelated to the number of components within each batch.

The cost of setting up the machine varies depending on the product and specific production run.The cost seems to relate to the time it takes to setup the machine.

iRobot has to repair the machines routinely based on the hours that the machine is being used.

Compute the amount of overhead cost allocated to each product and the profitability of each product using the activity based costing approach.