Jacobson Pharmaceuticals manufactures an over-the-counter allergy medication called Breathe. Jacobson is trying to win market share from Sudafed and Tylenol. The company has developed several different Breathe products tailored to specific markets. For example, the company sells 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. is trying ucts sto Jacobson's controller, Sophie Dean, has just returned from a conference on ABC. She asks Kris Yaman, supervisor of the Breathe product line, to help her develop an ABC system. Dean and Yaman identify the following activities, related costs, and cost allocation bases: (Click the icon to view the information.) Read the requirements ABC system. Dean es Data table X QA-Quality assuranc Estimated Indirect Estimated Quantity of Activity Activity Costs Allocation Base Allocation Base Materials handling 160,000 kilos 20,000 kilos Packaging 390,000 Machine hours 2.000 hours Quality assurance 112,000 Samples 1,600 samples Total Indirect costs 662,000 The commercial-container Breathe product line has a total weight of 8,700 kilos, used 900 machine hours, and required 270 samples. The travel-pack line had a total weight of 4,450 kilos, used 300 machine hours, and required 370 samples. Jacobson produced 3,000 commercial containers of Breathe and 20,000 travel packs. cate unit vity costs allocated to ea cial Print Done - Requirements lals, QA Quality 1. Compute the cost allocation rate for each activity. 2. Use the activity-based cost allocation rates to compute the indirect cost of each unit of the commercial containers and the travel packs. (Hint: Compute the total activity costs allocated to each product line and then compute the cost per unit) 3. The company's original single-allocation-based cost system allocated indirect costs to products at $350 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 4. Compare the activity-based costs per unit to the costs from the original system. How have the unit costs changed? Explain why the costs changed as they did. activity costs alloca Print Done Requirement 1. Determine the formula, then compte the cost ocation ne for each wy Round your wrowers to the newest whole otse Abbreviations voed. Mul Galyanca) Activity.com Mathi Page hour GA per Requirement 2.0ie Teed contention to comprendere cost of each unt of the commercial containers and the vowel peces de Compete the total activity cottocared to och produd in den comp/shopdesh Colonta w Travel Pack 0 re Requirement. The contender cost produs of $50 per machine hour. Comote the total de located to the commerce and to the www. acon Pharmaceutical manufacture over the counter wey madistincted retrying to controfores Dean, haustmed from a conference on ABC Ses Yana Heurement. The companys og unge Contractor cuts to proper macro. Computer cedores contres and serve packs under the original system. The completed portach od Indirect cost Product Mecated Commercial Travel Now compute the indirect to perforach product under the orginal singelion base system (Round the counter Commercial Container Travel Pack Totalnit costs Number of units Indirect cost Requirement 4. Compare the activity and costs per the costs from the orginal system Howave the cost changed Explain why the cost changed as they did The orginal system the commercial containers and the track The anginal system allocated However, it contains The ABC wystem sve to the original system. As allocate turnos costo comercial con of the material handing and quality
