Koontz Company manufactures two models of Industrial components-a Basic model and an Advanced Model. The company considers all of its manufacturing overhead costs to be fixed and it uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Koontz's controller prepared the segmented income statement that is shown below for the most recent year (he allocated selling and administrative expenses to products based on sales dollars) Basic 20,000 Advanced 10,000 Total 30,000 Number of units produced and sold Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income (1055) $3,000,000 2,300,000 700,000 720,000 $ (20,000) $2,000,000 1,350,000 650,000 480,000 $ 170,000 $5,000,000 3,650,000 1,359,000 1,200.000 $ 150,000 Direct laborers are paid $20 per hour Direct materials cost $40 per unit for the Basic model and $60 per unit for the Advanced model Koontz is considering a change from plantwide overhead allocation to o departmental approach. The overhead costs in the company's Molding Department would be allocated based on machine hours and the overhead costs in its Assembly and Pack Department would be allocated based on direct labor hours. To enable further analysis, the controller gathered the following information: Assemble Molding and Pack Total Manufacturing overhead costs $ 787,500 $ 562,500 $1,350,000 Direct labor hours: Basic 10,000 Advanced 20,000 30.000 5,000 10,000 15,000 Machine hours: Basic 12,000 12,600 Advanced 10,080 10,000 3. Koontz's production manager has suggested using activity-based costing instead of elther the plantwide or departmental approaches. To facilitate the necessary calculations, she assigned the company's total manufacturing overhead cost to five activity cost pools as follows: Activity Cost Pool Machining Assemble and pack Order processing Setups Other (unused capacity) Activity Measure Machine-hours in Molding Direct labor hours in Assemble and Pack Number of customer orders Setup hours Manufacturing Overhead $ 417,500 282,500 230,000 340,000 89,900 $1,350,000 She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order One setup hour is required for each customer order of the Basic model and three hours are required to setup for an order of the Advanced model The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising costs include $150,000 for the Basic model and $200,000 for the Advanced model, The remainder of the company's selling and administrative costs are organization-sustaining in nature Using the additional Information provided by the production manager, calculate 3. An activity rate for each activity cost pool b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach 4. Using your activity based cost assignments from requirement 3. prepare a contribution format segmented income statement that is adopted from Exhibit 4-8 (Hint Organize all of the company's costs into three categories: variable expenses, traceable fixed expenses, and common fixed expenses) 5. Using your contribution formet segmented income statement from requirement 4 calculate the break-even point in dollar sales for the Advanced model Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Reg 2A Reg 28 Reg 20 Req 3A Reg 38 Reg 30 Red 4 Regs Calculate an activity rate for each activity cost pool. (Round your answers to 2 decimal places) Activity Cost Pool Activity Rate Machining per MH Assemble and pack por DLH Order processing per order Setups per hour