Activity Machining Assembling Packaging Allocation Base Activity Cost Allocation Rate 80.00 per machine hour Number of machine hours Number of parts Number of finished seats 0.90 per part 1.40 per finished seat Requirements Compute the total cost of producing and packaging 30,000 baby seats. Also compute the average cost per seat. For bidding, SAP adds a 15% markup to total cost. What price will the company bid for the Ford order? Suppose that instead of an ABC system, SAP has a traditional product costing system that allocates manufacturing overhead at a plantwide overhead rate of $70 per direct labor hour. The baby seat order will require 11,000 direct labor hours. Compute the total cost of producing the baby seats and the average cost per seat. What price will SAP bid using this system's total cost? Use your answers to Requirements 2 and 3 to explain how ABC can help SAP make a better decision about the bid price it will offer Ford. saem Auto Part (SAP) hasSoat Manufacturing Dopartmont tat uoos ABC. SAP, activity cost allocation mtes includo the folong: Click on the icon to view ABC system data suppose For has asked or bid on 30 000 buit-in baby seata that would be instaled es an opdon on some Ford SUVs. Each seat has 14 pa s and the direct mate als coat per seat of 250 machine hours to fabricate some of the parts required for the seats $7 The ob would equi e 1 1 000 drect labor ho s at a labor wage ra e o S20 per hour. In addit on, AP ill use a to Read the requirements Requirement 1. Compute the total cost of producing and packaging 30,000 baby seets. Also compute the everage cost per seat. (Round the average cost per seat to the nearest cent) Direci materials Direat labor Allocated overmead: Machining9 Assembling Packaging Toal cost of order Divide by number of seats Average cost per seat Requirement 2. For bidding. SAP adds a 15% markup 10 total cost, what pnce wil the coroany bid lor re Fond order? Begin by determining the tormula to calculate the price the company wll bid for he Ford order Bid price The company vill bid'sfor the Ford order for tho Ford order. | Roquirement 3 uppoao that instead ofan A C s utom, P has a tradito al product ooatng st m tat aloca oo manufact ng ov head at pian a de overhead rato c S70 per drect labor hour. The baby seat ordar w I roquro 1 1,000 direct labor houra. Computo he total oost o p tho baby uan eate and the average cost por sont What price wil SAP bid using this syatem's total coa:? Begin by computing the lotal cost of producng the baby 8eets and the everage cost per 888L (Round the average cost per seat to the nearest cent Direct matoriala Direct labor Manufacturing avarhead Total cost of order Divide by number of seats Average cost per peat Begin by determining the formula to caiculate the price the company will bid for the Ford order using this system's total cost Bid price The company will bid s Requirement 4. Use your answers to Requirements 2 and 3 to expiain how ABC can help SAP make a beter decision about the bid price it wil ofter Ford SAPs bid would be chance of winning . bid. or the Ford order usling this system's total cost using the plentwide overhead rate then using ABC. Assuning nat the ABC system more acourately captures the costs caused by the order, the raditonal plantwide overhead system the order. This leeds to 8 Did price that SAPs chows that SAP can its chance of winning the bid by bidding Choose from any list or enter any number in the input fields and then continue to the next