Table 1: 2020 Estimated Manufacturing Costs (using Traditional Volume-Based Costing A B D TOTAL Direct Material Cost $90,000 $90,000 $180,000 $540,000 $900,000 Direct Labor Cost 84,000 84,000 168,000 504,000 840,000 Manufacturing Overhead Total Manufacturing Cost Units Produced 342,000 342,000 684,000 684,000 Cost per Unit 1 The company's 2020 pro forma income statement is presented in Table 2. There was no inventory on December 31, 2019 and it plans to have no inventory of any product on December 31, 2020. + Table 2: 2020 Pro Forma Income Statement A B D $410,400 $376,200 $957,600 $2,052,000 TOTAL $3,796,200 Sales Cost of Goods Sold Gross Profit Operating Expenses Profit Before Taxes 34,594 31,712 80,721 172.973 320,000 $56,200 In addition, Ripkens management team has identified the following information about its overhead activity cost pools and the assigned manufacturing overhead cost to each activity within the cost pool of activities: Table 3: Estimated Manufacturing Overhead (2020) Purchasing Machine setups for production runs Material movements Machine depreciation Facility rent Other manufacturing overhead Total $72,000 92,500 36,000 840,000 480,000 159,500 $1,680,000 The accounting staff has communicated with various departments within the company to acquire the following information: D 36 Table 4: Transactions by Product (2020 Estimates) Activity A B POs Written 180 18 126 #of production run setups 148 37 74 Material movements 600 120 Machine hours 10,500 3,500 28,000 Work cell size in sq. feet 6,400 3,200 16,000 111 TOTAL 360 370 1,200 70,000 32,000 360 120 28,000 6,400 You, the Certified Management Accountant, have used the information provided in Table 3 and Table 4 to construct the following Table 5 Cost per Transaction Calculations (2020 Estimates). Table 5: Cost per transaction Calculations (2020 Estimates) Assigned Activity Manufacturing Driver Activity Activity Cost Pool Overhead Amount Rate Purchasing $72,000 Machine Setups 92,500 Material Movements 36,000 Machine Cost 840,000 Facility Rent 480,000 Other Manufacturing Overhead* 159,500 *Other Manufacturing Overhead represents various overhead costs for which the cost-per-transaction is too expensive to determine. The Chief Management Accountant and the Controller thinks it best to allocate these costs (9.5% of total overhead) on a machine-hour basis. The following table will be used to assign the total manufacturing overhead costs to the different products A-D based upon their usage of the activity driver. Accounting staff will complete this table using data from previous information provided. TOTAL Table 6: Manufacturing Overhead Cost Assignment for 2020 using Activity Based Costing Activity Activity Cost Pool Rate A B D Purchasing Machine Setups Material Movements Machine Cost Facility Rent Other Manuf. Overhead Total Manuf. Overhead Table 7 will also need to be completed by the Accounting Department and will provide the estimated manufacturing costs for each product in order to calculate the total manufacturing cost per unit for each of the products A-D using the activity-based costing system. Table 7: Estimated Manufacturing Costs (using Activity-based Costing (ABC) A B D TOTAL Direct Material Cost Direct Labor Cost Manufacturing Overhead Total Manufacturing Cost Units Produced Total Mfg. Cost per Unit Requirement 4: Complete table 6 with information from tables 4 & t using the activity- based costing system. Possible points = 5 points Requirement 5: Complete table 7 with information from table 1 and table 6. Possible points = 5 points. = Ripken Products produces four chemical products: Abolish (A), Banish (B), Cancel (C), and Delete (D). The company has been using the traditional volume-based costing to account for its manufacturing costs. Under this costing system, the company charges manufacturing overhead costs to these products using direct labor dollars as an allocation base. The VP of Ripkens production department has expressed his dissatisfaction with the timeliness, usefulness and accuracy of the Accounting Department's monthly manufacturing control reports. The CEO, Paul Richards has also expressed his dissatisfaction with the current cost accounting system. In recent months, almost no information in these reports has been used to make decisions regarding managing production in the plant. The Controller has suggested replacing the current traditional volume-based costing system with the Activity-based costing system. Ripkens management team has suggested preparing reports for each costing system in order to decide which one provides the most accurate information and therefore, would be better suited to use in the internal decision-making process related to manufacturing operations. Ripken's Controller has turned the project over to you, Certified Management Accountant, with a completion date of September, midnight. To begin the project, you have gathered the following information and created various tables to assist you and your staff to complete the project. The company's 2020 manufacturing budget included the following amounts: direct material costs of $900,000 direct labor costs of $840,000 manufacturing overhead of $1,680,000 You have instructed your staff to complete Table 1 (an Excel Spreadsheet) using the above information by first calculating the predetermined overhead rate and applying it to the products A-D. With this information added to the table, total manufacturing cost can then be calculated and added to the table along with the calculated manufacturing cost per unit