Please see the attached excel sheet regarding apple snacks
Module 5 Assignment Apple Snacks manufactures a healthy alternative to potato chips called Garden Straws. Apple Snacks is trying to introduce this new product and gain market share in the snack foods industry. The company recently began distributing large, wholesale containers of Garden Straws to surrounding area schools and snack packs to vending machine companies and convenience stores. The CEO of Apple Snacks just attended a conference that focused on activitybased costing systems and she would like to implement such a system at Apple Snacks. She organized a team, which identified the following activities, related costs and cost allocation bases for the manufacturing of Garden Straws: Activity Estimated Indirect Activity Costs Materials handling Packaging Quality assurance Total indirect costs $35,000.00 $90,000.00 $12,500.00 $137,500.00 Allocation Base Ounces Machine hours Samples Estimated Quantity of Allocation Base 20,000 ounces 3,000 hours 1,000 samples The wholesale containers of Garden Straws had a total weight of 6,000 ounces, used 1,500 machine hours and required 150 samples. The snack packs had a total weight of 4,000 ounces, used 800 machine hours and required 250 samples. Apple Snacks produced 7,500 wholesale containers and 40,000 snack packs of Garden Straws. Requirements: 1 Compute the cost allocation rate for each activity. Materials handling cost allocation rate: Packaging cost allocation rate: Quality assurance cost allocation rate: 2 Calculate the indirect cost of each unit of the wholesale containers and the snack packs using the activitybased cost allocation rates. Wholesale containers indirect cost per unit: Snack packs indirect cost per unit: 3 Apple Snacks originally used a singleallocationbased cost system to allocate indirect costs to products at $45.00 per machine hour. Determine the total indirect costs allocated to the wholesale containers and the snack packs under the original allocation system. Then, calculate the indirect cost per unit for each product. Total indirect costs of wholesale containers using singleallocationbased cost system: Wholesale containers indirect cost per unit using singleallocationbased cost system: Total indirect costs of snack packs using singleallocationbased cost system: Snack packs indirect cost per unit using singleallocationbased cost system: 4 If Apple Snacks implements the ABC system, will it still incur manufacturing overhead that is overallocated or underallocated at the end of the year? Explain
