Requirements: 1. Compute the cost allocation rate for each activity. 2. Use the activity-based cost allocation rates to compute the activity costs per unit of the commercial containers and the travel packs. (Hint: First compute the total activity costs allocated to each product line, and then compute the cost per unit.) 3. Corbertt's original singleallocationbase costing system allocated indirect costs to products at $158 per machine hour. Compute the total indirect costs allocated to the commercial containers and to the travel packs under the original system. Then compute the indirect cost per unit for each product. 4. Compare the activity-based costs per unit to the costs from the single-allocation-base system. How have the unit costs changed? Comparing costs from ABC and singlerate systems Corbertt Pharmaceuticals manufactures an over-the counter allergy medication. The company sells both large commercial containers of 1,000 capsules to healthcare facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system would be beneficial: Estimated Estimated Indirect Allocation Quantity of Activity Activity Costs Base Allocation Base Materials handling ..... $ 115,000 Kilos .......... 23,000 kilos Packaging ............ 204,000 Machine hours . . 2,|25 hours Qualityr assurance ...... 113,000 Samples ....... 2,000 samples Total indirect costs ..... Eli 437,000 Other production information includes the following: Commerical Containers Travel Packs Units produced ........ 2,400 containers 41,000 packs Weight in kilos ........ 3,000 5,000 Machine hours ........ 1,500 500 Number of samples . . . . 200 300