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, Summer Donofrio, 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. Donofrio and Yackey identify the following activities, related costs, and cost allocation bases: E(Click the icon to view the information.) Read the requirements Estimated Quantity Estimated Indirect Allocation Activity Activity Costs of Allocation Base Base Materials handling 19,000 kilos 190,000 Kilos Packaging 2,000 hours 400,000 Machine hours 112,500 2,250 samples Quality assurance Samples $ 702,500 Total indirect costs The commercial-container Breathe product line had a total weight of 8,000 kilos, used 1,200 machine hours, and required 200 samples. The travel-pack line had a total weight of 6,000 kilos, used 400 machine hours, and required 300 samples. Wallace produced 2,500 commercial containers of Breathe and 50,000 travel packs 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, Summer Donofrio, 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. Donofrio and Yackey identify the following activities, related costs, and cost allocation bases: E(Click the icon to view the information.) Read the requirements Estimated Quantity Estimated Indirect Allocation Activity Activity Costs of Allocation Base Base Materials handling 19,000 kilos 190,000 Kilos Packaging 2,000 hours 400,000 Machine hours 112,500 2,250 samples Quality assurance Samples $ 702,500 Total indirect costs The commercial-container Breathe product line had a total weight of 8,000 kilos, used 1,200 machine hours, and required 200 samples. The travel-pack line had a total weight of 6,000 kilos, used 400 machine hours, and required 300 samples. Wallace produced 2,500 commercial containers of Breathe and 50,000 travel packs
