!!! Question 2, E5-26 (simil... Part 1 of 15 HW Score: 47.37%, 18.95 of 40 points O Points: 0 of 10 Save Fancy Doors, Inc, produces two types of doors, interior and exterior. The company's simple costing system has two direct-cost categories (materials and labor) and one indirect cost pool. The simple costing system allocates indirect costs on the basis of machine hours. Recently, the owners of Fancy Doors have been concerned about a decline in the market share for their interior doors, usually their biggest seller Information related to Fancy Doors production for the most recent year follows Click the icon to view the production data) Click the icon to view additional information ) Read the requirements Requirement 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system Before calculating the cost of an interior and exterior door, begin by calculating the overhead rate under the simple costing system First select the formula, then enter the applicable amounts and calculate the rate (Round your answer to the noarest cent Abbreviations used bgt = budgeted, aty = quantity.) Budgeted overhead rate Simple costing system Data table Interior Exterior Units sold 3,300 1,900 $ 140 $ 230 $ 50 $ 60 Selling price Direct material cost per unit Direct manufacturing labor cost per hour Direct manufacturing labor-hours per unit 11 $ 11 1.50 2.35 Production runs 40 90 Material moves 74 164 Machine setups 55 150 Machine-hours 5,500 4,500 Number of inspections 200 120 More info no The owners have heard of other companies in the industry that are now using an activity-based costing system and are curious how an ABC system would affect their product costing decisions. After analyzing the indirect-cost pool for Fancy Doors, the owners identify six activities as generating indirect costs production scheduling, material handling, machine setup assembly, inspection, and marketing Fancy Doors collected the following data related to the indirect-cost activities Activity Activity Cost Activity-Cost Driver Production scheduling $ 96,200 Production runs Material handling $ 40,936 Material moves Machine setup $ 26,650 Machine setups Assembly 90,000 Machine-hours Inspection S 17,600 Number of inspections Marketing costs were determined to be 5% of the sales revenue for each type of door $ Requirements 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system 2. Calculate the cost of an interior door and an exterior door under an activity-based costing system 3. Compare the costs of the doors in requirements 1 and 2 Why do the simple and activity-based costing systems differ in the cost of an interior door and an exterior door? 4. How might Fancy Doors, Inc., use the new cost information from its activity-based costing system to address the declining market share for interior doors
