Saved Help Save & Exit Exercise 17-17 (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. Budgeted Activity Process Assembly Activity Machining Setups Budgeted Cost $ 311,200 22,000 $ 333,200 Activity Cost Driver Machine hours (MH) Usage 7,400 Setups 120 Finishing Support Inspecting $ 220,000 Inspections 760 Purchasing $ 136,000 Purchase orders 450 Additional production information concerning its two models follows. Units and Activities Units produced Machine hours Setups Inspections Purchase orders Per Unit Selling price per unit Direct labor cost per unit Model X Model Z 1,600 3,200 2,400 5,000 40 80 460 300 300 150 Model X Model Z $ 415 150 125 $ 395 105 150 Direct materials cost per unit 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). Check my