Wallace Pharmaceuticals manufactures an over-the-counter allergy medication called Breathe. Wallace is trying to win market share from Sudafed and Tylenol. The company has developed several diferent Breathe products tailored to specific markets. For example, the company sells large commercial containers of 1,000 capsules to health-care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels Wallace's controller Summer De Ridder, has just returned from a conference on ABC She asks Kalb Yackey, supervisor of the Breathe product line to help her develop an ABC system DeRidder and Yackey identify the following activities related costs, and cost a location bases: (Click the icon to view the information) Read the requirements Requirement 1. Determine the formula, then compute the cost allocation rate for each activity. (Round your answers to the nearest whole dollar Abbreviations used: Mat Materials, QA Quality assurance) Mat, handling Activity cost location rate per kilo per hour per sample Packaging Requirement 2. Use the activity-based cost allocation rates to compute the indirect cost of each unit of the commercial containers and the travel packs (Hint Compute the total activity costs allocated to each product line and then compute the cost per unit) (Round the cost per unit to the nearest cont.) Commercial Container Travel Pack Materials handling Packaging Quality assurance Total Indirect costs / Number of units Indirect activity cost per unit Requirements. The company's original single-allocation based cost system alocated indirect costs to products at $450 per machine how. Compute the total indirect costs located to the commercial containers and to the travel packs under the original system. Then compute the indirect cost per unit for each product Other Bookmarks Requirement 2. Use the activity-based cost a location rates to compute the indirect cost of each unit of the commercial containers and the travel packs. (Hint Compute the total activity co allocated to each product line and then compute the cost per unit.) (Round the cost per unit to the nearest cont.) Print Commercial Container Travel Pack Materials handling Packaging Quality assurance Total Indirect costs / Number of units Indirect activity cost per unit Requirement 3. The company's original single-allocation-based cost system allocated indirect costs to products at $450 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 Indirect cost allocated Product Commercial (3) Travel Now compute the indirect cost per unit for each product under the original single-allocation-base system (Round the cost per unit to the nearest cent) Commercial Container Travel Pack Total indirect costs allocated / Number of units Indirect cost per unit Requirement 4. Compare the activity based costs per unit to the costs from the original system. How have the unit costs changed? Explain why the costs changed as they did. The original system (5) the commercial containers and (6) the travel packs Print Indirect cost per unit Requirement 4. Compare the activity-based costs per unit to the costs from the original system. How have the unit costs changed? Explain why the costs changed as they did. The original system (5) the commercial containers and (6) the travel packs The original system allocated (7) . However, commercial containers (8) The ABC system (9) So, relative to the original system, ABC allocates (10) of the material handling and quality assurance costs to commercial containers 2: Data Table Estimated Indirect Allocation Estimated Quantity Activity Activity Costs Base of Allocation Base Materials. banding .......... 160,000 kilos 16,000 kilos 430,000 Machine hours 2,500 hours Quality assurance......... 1,250 samples 705.000 Total indirect.costs.......... Packaging 115.000 Samples The commercial-container Breathe product line had a total weight of 8,729 kilos, used 900 machine hours, and required 230 samples. The travel-pack line had a total weight of 6.204 klos, used 300 machine hours, and required 330 samples. Wallace produced 4.050 commercial containers of Breathe and 60,000 travel packs 3: Requirements 1. Compute the cost allocation rate for each activity 2. Use the activity based cost allocation rates to compute the indirect cost of each unit of the commercial containers and the travel packs Hint Compute the activity costs located to each product line and then compute the cost per unit) 3. The company's original single-allocation-based cost system alocated indirect costs to products at $450 per machine hour. Compute the total indirect costs alocated to the commercia containers and to the travel packs under the original system. Then compute the Indirect cost per unit for each product 4. Compare the activity based costs per unit to the costs from the original system. How have the unit costs changed? Explain why the costs charged as they did . .. m e r in the wavelpicks. (Hint: Compute the total activity costs allo P e nen compute the cost per unit) 3. The company's original single allocation-based cost system allocated indirect costs to products at $450 per machine hour. Compute the total Indirect costs allocated to the comme containers and to the travel packs under the original system. Then compute the indirect cost per unit for each product 4. Compare the activity-based costs per unit to the costs from the original system. How have the unit costs changed? Explain why the costs changed as they did. (1) O O Cost allocation base (actual) O Cost allocation base (estimated) O Estimated Indirect activity cost Total assets Total hours Total liabilities Total owners' equity Total plantwide overhead Total revenues (2) O O Cost allocation base (actual) O Cost allocation base (estimated) O Estimated indirect activity cost Total assets Total hours Total liabilities Total owners' egoity Total plantwide overhead Total revenues O Estimated total indirect cost O Estimated qty of the allocation base (3) O Actual quantity of allocation base O Cost allocation rate O Estimated total direct cost (4) O Actual quantity of allocation base O Cost allocation rate O Estimated total direct cost O Estimated total Indirect cost Estimated aty of the allocation base (5) O (6) O overcosted underoosted overcosted undercosted 0 3 times as much indirect costs to commercial containers as to travel packs O 3 times as much indirect costs to travel packs as to commercial containers O the same amount of indirect costs to travel packs as to commerical containers (8) O O did not use 3 times as much of the material handling and quality assurance resources used the same amount of indirect costs as the travel packs (10) O less (9) O does not recognize that commercial containers do not require as much material handing and quality assurance as travel packs O recognizes that commercial containers do not require 3 times as much material handling and quality assurance as travel packs recognizes that commercial containers require the same amount of material handling and quality assurance as travel packs O more 2. Wallace Pharmaceuticals manufactures an over-the-counter allergy medication called Breathe. Wallace is trying to win market share from Sudafed and Tylenol. The company has developed several different Breathe products tailored to specific markets. For example, the company sells large commercial containers of 1,000 capsules to health-care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. Requirement 1. Determine the formula, then compute the cost allocation rate for each activity. (R assurance) (2) Mat. handling Packaging QA Requirement 2. Use the activity-based cost allocation rates to compute the indirect cost of each ur allocated to each product line and then compute the cost per unit.) (Round the cost per unit to the Commercial Container Travel Pack Materials handling Packaging Quality assurance Total indirect costs / Number of units Indirect activity cost per unit Requirement 3. The company's original single-allocation-based cost system allocated indirect costs commercial containers and to the travel packs under the original system. Then compute the indirect cu athe. ped sells 20 Wallace's controller, Summer DeRidder, has just returned from a conference on ABC. She asks Kalb Yackey, supervisor of the Breathe product line, to help her develop an ABC system. DeRidder and Yackey identify the following activities, related costs, and cost allocation bases: 2 (Click the icon to view the information.) Read the requirements ctivity. (Round your answers to the nearest whole dollar. Abbreviations used: Mat.=Materials, QA=Quality Activity cost allocation rate per kilo per hour CORRETA per sample st of each unit of the commercial containers and the travel packs. (Hint: Compute the total activity costs unit to the nearest cent.)