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The Deutsche Toy Company makes a variety of dolls at its operation in Munich. Its manufacturing process is highly automated. A recently installed ABC system

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The Deutsche Toy Company makes a variety of dolls at its operation in Munich. Its manufacturing process is highly automated. A recently installed ABC system has four activity centers (Click the icon to view the activity center data.) Two dolls are called "Cinderella" and "Prince." They require 0.30 and 0.90 kg of materials, respectively, at a materials cost of 2.70 for Cinderella and 7 20 for Prince One computer-controlled assembly line makes all dolls. When a production run of a different doll is started, a setup procedure is required to reprogram the computers and make other changes in the process. Normally, 500 Cinderella dolls are produced per setup, but for Prince dolls, only 250 are produced per setup. Products are packed and shipped separately so a request from a customer for, say, three different products is considered three different orders Suppose the gift shop at the Munich Toy Museum (Spielzeugmuseum) just placed an order for 220 Cinderella dolls and 110 Prince dolls. Read the requirements Unit costs Total unit oost Number of units be Total cost of dolls Total cost of order Cost per Driver Unit Activity Center Cost Driver Materials receiving and handling Kilograms of materials Production setup Number of setups Cutting, sewing, and assembly Number of units Packing and shipping Number of orders 0.80 per kg 65 per setup 0.50 per unit 11 per order 1. Compute the cost of the products shipped to the Munich Toy Museum gift shop. 2. Suppose the products made for the Munich Toy Museum gift shop required "Spielzeugmuseum" to be printed on each doll. Because of the automated process, printing the letters takes no extra time or materials, but it requires a special production Setup for each product. Compute the cost of the products shipped to the Munich Toy Museum gift shop 3. Explain how the activity-based costing system helps Deutsche Toy Company to measure costs of individual products or orders better than a traditional system that allocates all non-materials costs based on direct labor

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