Stylish Doors, Inc., produces two types of doors, interior and exterior. The company's simple costing system has two direct cost categories (materials and labor) and one indirect cost pool. The simple costing system allocates indirect costs on the basis of machine-hours. Recently, the owners of Stylish Doors have been concerned about a decline in the market share for their interior doors, usually their biggest seller. Information related to Stylish Doors production for the most recent year follows: (Click the icon to view the production data.) A (Click the icon to view additional information.) Read the requirements. 11 Requirement 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system. Before calculating the cost of an interior and exterior door, begin by calculating the overhead rale under the simple costing system. First select the formula, then enter the applicable amounts and calculate the rate. (Round your answer to the nearest cent. Abbreviations used: bgt. = budgeted, qty = quantity.) Budgeted overhead rate Simple costing system = X - X More info Data table Interior The owners have heard of other companies in the industry that are now using an activity-based costing system and are curious how an ABC system would affect their product costing decisions. After analyzing the indirect cost pool for Stylish Doors, the owners identify six activities as generating indirect costs: production scheduling, material handling, machine setup, assembly, inspection, and marketing. Stylish Doors collected the following data related to the indirect cost activities: Exterior 1,700 Units sold 3,100 $ 130 $ 210 stem. Firs $ 75 55 $ 16 $ Activity Cost $ 16 Activity Production scheduling $ 105,000 Activity Cost Driver Production runs Material moves 1.60 2.25 Material handling $ 43,680 Selling price Direct material cost per unit Direct manufacturing labor cost per hour Direct manufacturing labor-hours per unit Production runs Material moves Machine setups Machine-hours - Number of inspections 45 95 Machine setup $ 23,100 Machine setups 75 165 Assembly 40 135 $ $ 30,000 Machine-hours Inspection S 20.900 Number of inspections Marketing costs were determined to be 2% of the sales revenue for each type of door. 5,500 4,500 230 150 Print Done Print Done - applicable Requirements 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system. 2. Calculate the cost of an interior door and an exterior door under an activity-based costing system. 3. Compare the costs of the doors in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of an interior and exterior door? 4. How might Stylish Doors, Inc., use the new cost information from its activity-based costing system to address the declining market share for interior doors? Print Done