nts: OT 25 O'Donnell Company is an automotive component supplier. O'Donnell has been approached by Ford's Ohio plant to consider expanding its production of part 24Z2 to a total annual quantity of 2,400 units. This part is a low-volume, complex product with a high gross margin that is based on a proposed (quoted) unit sales price of $8.10. O'Donnell uses a traditional costing system that allocates indirect manufacturing costs based on direct-labor costs. The rate currently used to allocate indirect manufacturing costs is 300% of direct-labor cost. This rate is based on the $5,124,000 annual factory overhead cost divided by $1,708,000 annual direct-labor cost. To produce 2,400 units of 24Z2 requires $5,040 of direct materials and $960 of direct labor. The unit cost and gross margin percentage for part 24Z2 based on the traditional cost system are computed as follows: (Click the icon to view the traditional cost data.) The management of O'Donnell decided to examine the effectiveness of their traditional costing system versus an activity-based costing system. The following data have been collected by a team consisting of accounting and engineering analysts: | (Click the icon to view the ABC cost data.) Read the requirements. Requirement 1. Prepare a schedule calculating the unit cost and gross margin of part 24Z2 using the activity-based costing approach. Use the cost drivers given as cost-allocation bases. (Round the unit cost to two decimal places.) Annual Question list Question 1 total annual quantity of 2,400 units. This part is a low-volume, complex product with a high gross margin that is based on a proposed (quoted) unit sales price of $8.10. O'Donnell uses a traditional costing system that allocates indirect manufacturing costs based on direct-labor costs. The rate currently used to allocate indirect manufacturing costs is 300% of direct-labor cost. This rate is based on the $5,124,000 annual factory overhead cost divided by $1,708,000 annual direct-labor cost. To produce 2,400 units of 24Z2 requires $5,040 of direct materials and $960 of direct labor. The unit cost and gross margin percentage for part 24Z2 based on the trad The Data table hav - vity-based costing system. The following data Re Per unit Total (/2,400) Direct material $ 5,040 $ 2.10 Direct labor 960 0.40 Re Indirect production: (300% of direct labor) 2,880 1.20 costing approach. Use the cost drivers given as $ 8,880 | Total cost 3.70 8.10 Sales price quoted $ 4.40 Gross margin 54.3 Gross margin percentage % Clear all Check answer Help me solve this Video Get Print Done O'Donnell Company is an automotive component supplier. O'Donnell has been approached by Ford's Ohio plant to consider expanding its production of part 24Z2 to Requirement 1. Prepare a schedule calculating the unit cost and gross margin of part 24Z2 using the activity-based costing approach. Use the cost drivers given as cost-allocation bases. (Round the unit cost to two decimal places.) Annual Cost/Activity Center: Cost-Allocation Base Cost Quality: Production scheduling: Setup: Shipping: Shipping administration: Production: Total indirect cost Get more help Clear all Check answer Activity Center Quality Production scheduling Setup Shipping Shipping administration Production Total indirect production cost Activity Center: Cost Drivers Quality: Number of pieces scrapped Production scheduling and setup: Number of setups Shipping: Number of containers shipped Shipping administration: Number of shipments Factory Overhead Costs (Annual) 468,000 88,000 1,200,000 342,000 84,000 2,080,000 $ 4,262,000 Annual Cost-Driver Quantity 9,000 800 57,000 1,400 Production: Number of machine hours 16,000 The accounting and engineering team has performed activity analysis and provides the following estimates for the total quantity of cost drivers to be used to produce 2,500 units of part 24Z2: Cost Driver Pieces scrapped Setups Containers shipped Shipments Machine hours Cost-Driver Consumption 170 4 7 3 17