pa o20 Wallace Pharmaceuticals manufacturers an over-the-counter allergy medicat
ID: 2397694 • Letter: P
Question
pa o20 Wallace Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both 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. The following information has been developed to determine if an activitybased costing system would be benefidial dy olidbehi the icon to vow Click the icon to view the information.) Read the requirements. Requirement 1. Wallace's criginal single plantwide overhead allocation rate costing system allocated indirect costs to products at $81.50 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. Round to two decimal places. Select the formula, and then enter the amounts to compute the indirect cost per unit for each product. (Abbreviation used: mfg. manufactur Data Table Allocated mfg. OH cost 159,740.00 40,750.00 Number of units 2,800 50,000 Indirect cost per unit - Commercial containersS Travel packs Requirement 2. Compute the predetermined overhead allocation rate for each activity Begin by selecting the formula to caloulate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the al 57.05 Estimated Quantity of Allocation Base 19,000 kilos :$0.82 Activity Indirect Costs Allocation Base Materials handling 95,000 Number of kilos 200,000 Number of machine hours 112,500 Number of samples 407,500 5,000 hours dollar.) Quality assurance 1,875 samples Total indirect costs Estimated overhead costs Estimated qty of the allocation baseallocation rate Materials handling S Actual production information includes the following 95,000 200,000 112,500 19,000 5,000 1,875 40 Commercial Containers Trael Packs Quality assurance S 60 50,000 packs Units produced Weight in kilos Machine hours Number of samples 2,800 containers 12,600 1,960 280 5,000 500 750 Requirement 3. Use the predetermined overhead allocation rates to compute the activity-based costs per unit of the commercial containers allocated to each product line, and then compute the cost per unit.) Enter any number in the edit fields and then click Check Answer. Print Done Clear AllExplanation / Answer
Requirement 3
Commertial Containers
Predetermined OH rate per unit
Actual Quantity of Allocation base unit
Allocated Manufacturing Overhead Cost
Materila Handling
$ 5.00
12600
$ 63,000.00
Packing
$ 40.00
1960
$ 78,400.00
Quality Assurance
$ 60.00
280
$ 16,800.00
Total Activity Based Costs
$ 158,200.00
Number of Units
2800
Activity Based Cost per Unit
$ 56.50
Travel Packs
Predetermined OH rate per unit
Actual Quantity of Allocation base unit
Allocated Manufacturing Overhead Cost
Materila Handling
$ 5.00
5000
$ 25,000.00
Packing
$ 40.00
500
$ 20,000.00
Quality Assurance
$ 60.00
750
$ 45,000.00
Total Activity Based Costs
$ 90,000.00
Number of Units
50000
Activity Based Cost per Unit
$ 1.80
Commertial Containers
Predetermined OH rate per unit
Actual Quantity of Allocation base unit
Allocated Manufacturing Overhead Cost
Materila Handling
$ 5.00
12600
$ 63,000.00
Packing
$ 40.00
1960
$ 78,400.00
Quality Assurance
$ 60.00
280
$ 16,800.00
Total Activity Based Costs
$ 158,200.00
Number of Units
2800
Activity Based Cost per Unit
$ 56.50
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