Open doors, Inc, produces two types of doors interior and exterior. The company's traditional method of allocating overhead is based on machine hours. Recently, the owners of Open Doors have been concerned about a decline in the market share for their interior doors, usually their biggest seller. Information related to Open Doors production for the most recent year follow: Interior Outdoor Units sold 3,200 1,800 Selling Price P 125 P 200 Direct material cost per unit P 30 P 45 Direct labor cost per hour P 16 P 16 Direct labor hours per unit 1.50 2.25 Production Runs 40 85 Material moves 72 168 Machine set-ups 45 155 Machine hours 5,500 4,500 Number of inspections 250 150 , The owners have head of other companies in the industry that are now using ABC costing and are curious how an ABC system would affect their product costing decision. After analyzing the indirect costs for open doors, six activities were identified as generating indirect costs: production scheduling, materials handling, machine set-ups, assembly, inspection and marketing. Open Doors collected the following data related to I ndirect costs. Interior Outdoor Production Scheduling P 95,000 Production runs Materials handling P 45,000 Materials moves Machine set up P 25,000 Machine set-ups Assembly P 60,000 Machine hours Inspection P 8,000 Number of inspections Marketing costs were determined to be 3% of the sales revenue for each type of door. 1. What is the predetermined overhead rate under the method? 2. Using the rate computed in No. 1 above, calculate the total overhead to be assigned to each of the two products. Interior Outdoor 3. Using the total overhead computed in No. 2 above, compute the unit cost of the two products. Interior Outdoor Direct Materials (two decimal places) Direct Labor (two decimal places) Factory Overhead (two decimal places) l Unit Cost (two decimal places) 4. Using ABC Costing fill up the table below: Est. OH Cost Total Activity OH Rate Interior Outdoor Production Scheduling per prod. run Answer Answer Materials Handling {1:nm:=45000} per mat. Move Answer Answer Machine Set-up per mach setup Assembly per machine hour Inspection per inspection. Units Produced 3200 1800 OH rate per unit 5. Using the OH Rate computed above, determine the unit cost. Interior Outdoor Direct Materials Direct Labor Factory Overhead Unit Cos