Razorback Remedies produces a natural allergy treatment in tablet form. The company sells large containers of 1,000 tablets to university health centers and small containers of 50 tablets to health food stores. The company is considering adopting an activity-based costing system and the accountant gathered the following information: Activity Materials handling Estimated Indirect Cost $350,000 Cost Driver Pounds Packaging 500,000 Estimated Activity 58,000 pounds 8,000 hours 6,000 samples Machine Hours Number of Samples Quality control 250,000 Total indirect costs $1,100,000 Other production information follows: Large Containers Units produced 20,000 Weight in pounds 40,000 Machine hours 6,000 Number of samples 1,000 Small Containers 180,000 18,000 2,000 5,000 1. Razorback's current system allocates Indirect cost to products on the basis of machine hown. Calendare the predetermined overhead toplication rate per machine hour. Predetermined Overhead Rate = $1,100,000/ (6,000+2,000) $137.50 per machine hour 2. Use the overhead application rate per machine hour to compute the Indirect cost applied to each product line (large containers and small containers). In wanien, som Current System Large Containers Small Containers Predetermined Overhead Rate 1375 Number of Machine Hours 6000 2000 Indirect Cost Applied 137.5*6000). (137.5-2000) 825000 275000 Number of units produced 180000 Indirect cost per unit (825000/20000, (27500/180000) 137.5 20000 41.25 1.53 Activity Based Costing Activity Materials Handling Packing Quality Control Total Indirect Costs Number of Units Indirect cost per unit Estimated Indirect Cost Cost Driver 350000 500000 250000 1100000 Cost Rate Large Containers Small Containers 58000 6.034482759 241379 108621 8000 62.5 375000 125000 6000 41.66666667 41667 208333 658046 441954 20000 18000C 32.9 2.4 Question 3. Assuming the company wants to convert to an activity-based system, calculate the cost per unit of the cost driver for each activity in the first chart above. Please provide step by step