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. Wallace's controller, Sophia Doody, has just returned from a conference on ABC. She asks Kalin Yung, supervisor of the Breathe product line, to help her develop an ABC system. Doody and Yung identify the following activities, related costs, and cost allocation bases: (Click the icon to view the information.) Dond 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) Requirements Activity cost = allocation rate Data table Activity Materials handling. Packaging.... Estimated Indirect Activity Costs Allocation Base 160,000 Kilos Estimated Quantity of Allocation Base 20,000 kilos 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 total activity costs allocated to each product line and then compute the cost per unit.) 3. The company's original single-allocation-based cost system allocated indirect costs to products at $350 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. 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. Quality assurance Total indirect costs 390,000 Machine hours 112,000 Samples 662,000 2,000 hours 1,600 samples The commercial-container Breathe product line had a total weight of 8,700 kilos, used 900 machine hours, and required 270 samples. The travel-pack line had a total weight of 4,450 kilos, used 300 machine hours, and required 370 samples. Wallace produced 3,000 commercial containers of Breathe and 20,000 travel packs. Print Done Print Done -