Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Robert Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commerctal containers of 1,000 capsules to health care facilties and travel packs of

image text in transcribed
image text in transcribed
image text in transcribed
Robert Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commerctal containers of 1,000 capsules to health care facilties 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: Click the icon to view the information.) Read the requirements. Requirement 1. Robert's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $140.00 per machine hour. Compute the total indirect costs allocated to the commercial containers and to the fravel packs under the original system. Then compute the indirect cost per unit for each product. Round to two decimal places: Select the formula, and then enter the amounts to compute the indirect cost per unit for each product. (Abbreviation used; mig. = manufacturing. Round dollar amounts to two decimal places.) Requirement 2. Compute the predetermined overhead allocation rate for each activity. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Abbreviation used: qty = quantity. Round your answers to the nearest wholo dollar.) Requirements 1. Robert's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $140.00 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. Round to two decimal places. 2. Compute the predetermined overhead allocation rate for each activity. 3. Use the predetermined overhead allocation rates to compute the activity-based costs per unit of the commercial containers and the travel packs. Round to two decimal places. (Hint: First compute the total activity-based costs allocated to each product line, and then compute the cost per unit.) 4. Compare the indirect activity-based costs per unit to the indirect costs per unit from the traditional system. How have the unit costs changed? Explain why the costs changed. Actual production information includes the following: \begin{tabular}{lrr} \hline & Commercial Containers & Travel Packs \\ \hline Units produced & 2,000 containers & 51,000 packs \\ Weight in kilos & 9,000 & 5,100 \\ Machine hours & 1,600 & 510 \\ Number of samples & 200 & 765 \\ \hline \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

7. Identify six intercultural communication dialectics.

Answered: 1 week ago