Need help with the third requirement. I believe the top answers are correct.
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:
S Data Table ew Activity e lo ed Estimated Estimated Quantity of Indirect Costs Allocation Base Allocation Base $ 96,000 Number of kilos 24,000 kilos 210,000 Number of machine hours 3,000 hours 114,000 Number of samples 1,900 samples $ 420,000 Materials handling Packaging Quality assurance Total indirect costs th Actual production information includes the following: te Commercial Containers 3,500 containers 12,250 2,450 700 Units produced Weight in kilos Machine hours Number of samples Travel Packs 51,000 packs 5,100 510 bril 765 Wallace 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. Wallace'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 used: mfg. = manufacturing. Round dollar amounts to two decimal places.) Allocated mfg. OH cost + Number of units = Indirect cost per unit Commercial containers 343000 2450 140 Travel packs 71400 51000 1.40 Requirement 2. Compute the predetermined overhead allocation rate for each activity. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Abbreviation used: qty = quantity. Round your answers to the nearest whole dollar.) Predetermined OH Estimated overhead costs allocation rate + Estimated qty of the allocation base 24000 Materials handling 96000 = 4 210000 3000 70 Packaging Quality assurance 114000 1900 60 Requirement 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.) Begin by selecting the formula to allocate overhead (OH) costs. Predetermined OH allocation rate x Actual qty of the allocation base used = Allocated mfg. overhead costs Compute the total activity-based costs allocated to commercial containers, and then compute the cost per unit for commercial containers. Finally, compute the total activity-based costs allocated to travel packs then compute the cost per unit for travel packs. (Round the cost per unit to two decimal places.) Commercial containers Travel packs Materials handling Packaging Quality assurance Total activity-based costs Number of units Activity-based cost per unit
