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Estimated Indirect Costs Allocation Base Estimated Quantity of Allocation Base Activity Materials handling Packaging $ 96,000 Number of kilos 24,000 kilos 3,000 hours Quality assurance 210,000 Number of machine hours 114,000 Number of samples 420,000 1,900 samples $ Total indirect costs Actual production information includes the following: Commercial Containers Travel Packs 3,000 containers Units produced Weight in kilos Machine hours 51,000 packs 10,200 13,500 2,400 510 Number of samples 600 765 Print Done i Requirements Car 1. McNeil's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $140.00 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. 2. Compute the predetermined overhead allocation rate for each activity. 3. Use the predetermined overhead allocation rates to compute the activity-based costs per unit of the commercial containers and the travel packs. Round to two decimal places. (Hint: First compute the total activity-based costs allocated to each product line, and then compute the cost per unit.) 4. Compare the indirect activity-based costs per unit to the indirect costs per unit from the traditional system. How have the unit costs changed? Explain why the costs changed. Print Done IUL pe possa McNeil Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sets both large commercial containers of 1.000 capsules to health care facilities and is of 20 sto hope in Mirports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system would be beneficial Click the icon to view the information) Read the rements Question Requirement 1. Mchleifs orginal single partie overhead alocation rate costing system allocated indirect costs to products $140.00 per machine hour. Compute the total indirect contacted to the comme containers and to the travel packs under the original stem. Then compute the indirect cost per unit for each product Round to two decimal places Select the forma and then enter the amount to computere Indirect cost per unit for each product revised manufacturing Round dollar artist to deciple) Indirectos Commercial containers Travel packs Requirement 2. Compute the predetermined overhead allocation rate for each activity Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity (Abu answers to the nearest whole dollar) Predetermined OH allocation rate Materials handling Packaging Quality assurance Requirements. Use the predetermined overtrend location rates to compute the activity based couts per unit of the commercial containers and the travel packa, Round to no dicinal place et First compute the total activity-based costs located to each product line, and then compute the cost per unit) Begin by selecting the formula to allocate overhead (OH) costs. Allocated my overed.com Compute the total activity based costs allocated to commercial containers, and then compute the cost per unit for commercial container. Frally, compute the total activity based conta allocated to naval packah compute the cost per unit for travel packa. (Round the cost per unit to two decimal place Commercial containers Travel packs Materials handling Packaging Quality Assurance Total activity-based costs Number of units Activity-based cost per unit Requirement 4. Compare the indirect activity-based costs per unit to the indirect costs per unit from the traditional system. How have the unit costs changed? Explain why the cost charged. Relative to activity-based costing (ABC), the traditional system the commercial containers and the travel packs The traditional system allocates overhead costs solely on Activity based conting (AC) cognizes that although commercial container require the same proportion of material handling and quality assurance machine hours per unt than tww packs, they

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