Willitte Pharmaceuticals manufactures an over-the-counter allergy medication called Breathe and is Willitte Pharmaceuticals' controller, Sandra Dean, has just returned from a conference on ABC. She trying to win market share from Sudafed and Claritin. Willitte Pharmaceuticals has developed asks Keith Yeung, supervisor of the Breathe product line, to help her develop an ABC system. Dean several different Breathe products tailored to specific markets. For example, the company sells large and Yeung identify the following activities, related costs, and cost allocation bases: commercial containers of 1,000 capsules to health-care facilities and travel packs of 20 capsules to (Click the icon to view the information.) shops in airports, train stations, and hotels. Requirements Requirement 1. Compute the cost allocation rate for each activity. Determine the formula and then compute the cost allocation rate for each activity. (Round your answers to the nearest whole dollar.) Activity overhead rate /kg Mat. handling Packaging QA /hour /sample 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 cent.) Materials handling Packaging Quality assurance Total indirect costs Commercial Container Travel Pack / Number of units Indirect activity cost per unit Requirement 3. Willitte Pharmaceuticals's original single-allocation-based cost system allocated indirect costs to products at $320 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. Product Commercial Travel x x = Indirect cost allocated 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.) Total indirect costs allocated / Number of units Indirect cost per unit Commercial Container Travel Pack Additional information Estimated Indirect Allocation Activity Activity Costs Base Estimated Quantity of Allocation Base Materials handling $ 160,000 Kilograms ..... 16,000 kg Packaging 475,000 Machine hours ... 2,500 hours Quality assurance 96,000 Samples $ 731,000 2,000 samples Total indirect costs The commercial-container Breathe product line had a total weight of 8,200 kilograms, used 1,080 machine hours, and required 260 samples. The travel-pack line had a total weight of 5,800 kilograms, used 360 machine hours, and required 410 samples. Willitte produced 2,800 commercial containers of Breathe and 55,000 travel packs. Print Done