The question is the last picture that say "Compute the ACDRs. Thank you

Traditional Costing Systems: The Cooper Pen Company Cooper Pen, is a low-cost producer of blue pens and black pens. Recently, Cooper Pen introduced red and purple pens, using same basic production technology, combined with more complex processes, selling at prices respectively 3% and 10% higher than black and blue According to cost estimates based on traditional costing, overall profitability for all pens decreased, but red and purple pens recorded higher profit margins than black and blue Decision: Should Cooper Pen change its product mix so as to de emphasize blue and black and increase production of new specialty colored pens? Table 1: Profitability by Product (Traditional Costing) Blue Black Red Purple Total Units 50,000 40,000 9.000 1.000 100.000 Price $ 4.50 $ 4.50 $ 4.65 $4.95 Sales $225,000 $180,000 $41,850 $4,950 $451,800 Direct Materials 75,000 60,000 14,040 1.650 150,690 Direct Labor 30,000 24,000 5.400 600 60.000 Indirect Costs 90,000 72,000 16,200 1,800 180.000 Tot. Mfg. Cost 195,000 156,000 35,640 4,050 390.690 $ 30,000 $ 24,000 S 6,210 $ 900 $ 61,110 Gross Margin GM GMT 13.3% 110 148% 118 01135% ! Cooper's Traditional Cost Accounting System Cooper uses its plant as a single cost center for cost accumulation - All indirect support costs of the plant were aggregated at the plant level into one cost pool and allocated to products based on each product's direct labor cost Currently, the cost system's overhead (indirect costs) allocation (burden) rate was 300% of direct labor cost (i.e., indirect support costs were allocated at a rate of $3 per S1 of direct labor costs). Before the new pens were introduced, the overhead burden rate was only 200% of direct labor cost. the most appropriate cost drivers that drive the costs of these activities The activities and the activity cost drivers used by Cooper for its ABC Table 2: Activities, Activity Cost Pools and Activity Cost Drivers ACTIVITY ACTIVITY COST DRIVER HANDLE PRODUCTION RUNS PRODUCTION RUNS SETUP HOURS SET UP MACHINES SUPPORT PRODUCTS NUMBER OF PRODUCTS RUN MACHINES MACHINE HOURS PROVIDE FRINGE BENEFITS LABOR DOLLARS Table 3: Activity Cost Drivers Requirements per Product Unit & Total Cost Driver Levels for Each Activity Activity Cost Driver/unit DL hr/unit Total ** Blue 0.02 0.1 Black 0.02 0.1 Red 0.02 Purple 0.02 0.1 2,000 Mach.hr/unit 10.1 10,000 15 200 5.6 5.6 Prod. runs 70 Setup time hr/run Total setup hr 280 of products 1 2.4 156 280 S4 800 1 of Pens 150.000 40.000 19.000 1.000 Assignment 3 - Compatibility Mode - Saved to this PC olufemi ba Review Design Layout References Mailings imes New Rom - 12 AA AA TU*** A.A View Help Table Design Layout Search EE AT AaBlCcl AaBbc AaBbcc Aa BbCel AaBbcc - - Emphasis Heading 1 11 Normal Strong Subtitle Font Styles Paragraph Case Requirements: Review carefully the text materials on Traditional and ABC Allocations 1. Compute the ACDRs in Table 4. Table 4: Activity Cost Pools and Activity Cost Driver Rates (ACDRs) Activities Activity Cost Activity Cost Driver Driver Quantity ACDR Handle Production $66,000 Runs Set up machines $33,600 Support Products $14,400 Number of production runs Number of setup hours Number of products Number of machine hours Run Machines $42.000 $156.000 Focu