Willitte Pharmaceuticals manufactures an over-the-counter allergy medication called Breathe. Willitte 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. Willitie's controller, Susan Donaldson, has just returned from a conference on ABC. She asks Kyle Yeng, supervisor of the Breathe product line to help her develop an ABC system. Donaldson and Yeng identify the following activities, related costs, and cost allocation bases: (Click the icon to view the information.) Read the requirements DISED Requirement 1. Determine the formule, then compute the cost allocation rate for each activity. (Round your answers to the nearest whole dollar. Abbreviations used: Mat.=Materials, QA=Quality assurance) Activity cost + = Estimated indirect activity cost 190,000 allocation rate 10 per kilo Mat, handling $ Cost allocation base (estimated) 19,000 2.000 + Packaging $ 400,000 $ 200 per hour QA $ 112.500 2,250 $ 50 per 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.) Travel Pack Commercial Container $ 80,000 Data Table Materials handling Packaging Quality assurance Total Indirect costs 240,000 10,000 330,000 Estimated Quantity of Allocation Base 19,000 kilos 2,000 hours Number of units Estimated Indirect Activity Activity Costs Allocation Base Materials handling ......... 5 190,000 kilos Packaging......... 400,000 Machine hours Quality assurance S 702,500 Total indirect costs 2,500 $ Indirect activity cost per unit 132.00 112,500 Samples 2,250 samples 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. Willitte produced 2,500 commercial containers of Breathe and 50,000 travel packs. Help Me Solve This Video Get More Help er 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 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 $300 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 activit ased costs per unit to the costs from the original system. How have the unit costs changed? Explain why the costs changed as they did. Print Done