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Gibson pharmaceuticals manufacturers an over the counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, trsin stations, and hotels. Tge following information has been developed to determine if an activity-based costing system would be beneficial:

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Question Help Gran Pharmaceuticals manufactures an over the counter allergy medication. The company els both wge commercial contains of 1,000 capsules to neath care facilities and travel pack of 20 capsules to stop in airports, train stations and hotels. The following formation has been developed to determine an activity and conting system would be benefici Click the icon to view the information) Read the roulements Requirement 1. Gibson's original single plantwide overhead slocation rate costing system allocated indirect costs to products at $31.50 per machine hour. Compute the direct conte located to come cons and to the travel 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. (Abtretinend migratorin. Round door amounts to Aloem OH cost Number of Commercial containers --the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facili ng information has been develoned to determine if an activity based costing system would he beneficial: Data Table ride over ginal sys Jute the tot = to come Activity Materials handling Packaging punts to tw Estimated Quantity of Allocation Base 19,000 kilos 5,000 hours 1,875 samples Estimated Indirect Costs Allocation Base $ 95,000 Number of kilos 200,000 Number of machine hours 112,500 Number of samples 407,500 H cost Quality assurance Total indirect costs Actual production information includes the following: Units produced Weight in kilos Commercial Containers 2,200 containers 7.700 1,650 Travel Packs 50,000 packs 5,000 Machine hours 500 Number of samples 220 750 Print Done en click Check Answer he-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care fa g information has been developed to determine if an activity-based costing system would be beneficial: * Requirements e o nal the itst SOS 1. Gibson's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $81.50 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. Print Done dick Check