The Pond Kit Company manufactures kits for fish ponds. The managers recently set up an ABC system to identify and reduce non-value-added activities. The ABC system includes the following cost pools, cost drivers, and estimated costs for manufacturing activities:

REQUIRED
The company manufactures 10 kits per batch. Each kit requires 20 parts and two hours in molding, and weighs 30 pounds.
A. Calculate the total ABC manufacturing cost per batch.
B. Calculate the total ABC cost per finished kit.
C. Suppose that Pond Kit's managers also want to allocate marketing costs and customer service to each product. Total marketing costs for the period were $15,000, and customer service costs were $25,000. Number of batches produced was 1,000. Calculate the total ABC cost per unit and cost per kit, including the costs of marketing and customer services.
D. Are the activities listed likely to be the only possible set of activities for Pond Kit Company? Why or why not?
E. Describe how the managers and accountants of Pond Kit Company might use this new ABC system to identify non-value-added activities.

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Activity Cost Driver Number of parts Molding hours Number of batches Weight Finished kits Finished kits Finished kits Cost Allocation Rate $ 1.00 per part 40.00 per hour Material handling Forming Molding setup Packing and shipping Inspection Direct labor Direct materials 50.00 per batch 1.30 per pound 10.00 per kit 20.00 per kit 100.00 per kit