Ret Exercise 1/-1/(Algo) using activity-based costing to allocate overhead, compute product cost and gross profit LO P3 Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow Process Assembly Activity Machining Setups Budgeted Cost $ 310, 600 28,000 $ 338,600 Activity Cost Driver Machine hours (M) Setups Budgeted Activity Usage 7,600 120 Finishing Support Inspecting Purchasing 820 $ 224,000 $ 132,000 Inspections Purchase orders 510 Additional production information concerning its two models follows Units and Activities Units produced Machine hours Setups Inspections Purchase orders Model x 1,400 2,200 40 540 340 Model z 2,800 5,400 50 280 170 Additional production information concerning its two models follows. Units and Activities Units produced Machine hours Setups Inspections Purchase orders Model X 1,400 2,200 40 540 340 Model z 2,800 5,400 80 280 170 Per Unit Selling price per unit Direct materials cost per unit Direct labor cost per unit Model X $ 405 155 140 Model z $ 385 105 125 1. Compute the activity rate for each activity using activity-based costing. 2. Using activity-based costing, compute the overhead cost per unit for each model 3. Compute the total product cost per unit for each model 4. For each model compute the gross profit per unit (selling price per unit minus product cost per unit) Required 1 Required 2 Required 3 Required 4 Compute the activity rate for each activity using activity-based costing. (Round "Activity rate" to 2 decimal places.) Activity Budgeted Cost Budgeted Activity Usage Activity Rate Machining 310,600 7,600 machine hours s 40.87 per machine hour 28,000 120 setups s 233.33 per setup Inspecting 224 000 820 Inspections S 273.17 per inspection Purchasing 132 000 510 purchase orders $ 258 82 per purchase order Setups Required 2 > Required 1 Required 2 Required 3 Required 4 Using activity-based costing, compute the overhead cost per unit for each model. (Round "Activity Rate" to 2 decimal places and other answers to the nearest whole dollar amount.) Overhead cost per unit-Model X Allocated Activity Activity Usage Activity Rate Cost Machining Setups setups Inspection inspections Purchasing orders Total allocated cost $ Units produced Overhead cost per 0 0 unit Activity Rate Allocated Cost Overhead cost per unit-Model Z Activity Activity Usage Machining MH Setups setups Inspection inspections Purchasing orders Total allocated cost Units produced Overhead cost per unit 0 0 Required 1 Required 2 Required 3 Required 4 Compute the total product cost per unit for each model. (Round "Activity Rate" to 2 decimal places and other intermediate calculations to the nearest whole dollar amount. Round your final answers to 2 decimal places.). Per Unit Direct Materials Direct Labor Overhead Product Cost per Unit Model X 155.00 140.00 Model 2 105.00 125.00 Required 1 Required 2 Required 3 Required 4 ***** For each model, compute the gross profit per unit (selling price per unit minus product cost per unit). (Round "Product cost per unit" and "Gross Profit" to 2 decimal places and other intermediate calculations to the nearest whole dollar amount Negative amounts should be indicated with a minus sign. Product cost per unit Gross Profit Por Unit Model X Model Z Selling Price $ 405 385
