Kies Inc. manufactures only two products, Medium (42-inch) and Large (63-inch) plasma screen TVs. To generate adequate profit and cover its expenses throughout the value chain, Kies prices its TVs at 200% of manufacturing cost. The company is concerned because the Large model is facing severe pricing competition, whereas the Medium model is the low-price leader in the market. The CEO questions whether the cost numbers generated by the accounting system are correct. He has just learned about ABC and wants to reanalyze this past year's product costs using an ABC system. Information about the company's products this past year follows: (Click the icon to view the data.) Currently, the company applies manufacturing overhead on the basis of direct labour hours. The company incurred $929,080 of MOH this three primary production activities that generate MOH costs: (Click the icon to view the production activities.) Requirements Production activities Data sae TV/c) The ABC team identified. Manufacturing cost Direct materials Direct labour Medium Large $ 668,000 $ 1,240,000 219,000 385,000 341,872 587,128 The company's manufacturing overhead numbers are as follows: Materials Handling ($176,800); driven by number of material orders Machine Processing ($648,600); driven by machine hours Packaging ($103,680); driven by packaging hours The company's only two products required the following activity leve the year: Medium (42-inch) Plasma TVs: Total direct material cost: $668,000 Total direct labour cost: $219,000 Production volume: 3,200 units Large (63-inch) Plasma TVs: Total direct material cost: $1,240,000 Total direct labour cost: $385,000 Production volume: 3,700 units Manufacturing overhead Total manufacturing cost Number of units produced $ 1,228,872 $ 2,212,128 3,200 Material Orders Machine Packaging 3,700 Handled Hours Hours $ 384.02 $ 597.87 Cost per unit Medium. 390 24,000 4,600 Requirement 2. Use ABC to find the total cost of producing all Medium TVs and the total cost of producing all Large TVs. What Begin by identifying the formula to compute the activity cost allocation rates, and then calculate the activity cost allocation rates Large.. 290 23,000 6,200 Activity overhead / Total activity allocation base Activity allocation rate Materials handling Machine processing Packaging /mat. orders handled /machine hour /packaging hour Print Done Print Done