After reviewing the new activity-based costing system that Janis McGee has implemented at Joplin Industries's Port Arthur manufacturing facility, Kris Kristoff, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 103,000 units of J25P and 41,500 units of J40X in the first quarter. He believes that with his more efficient setup routine, he can reduce the number of setup hours for both the J25P and the J40X products by 28 percent. J40X J25P $1,503,000 Direct material Direct labor $2,406,000 Assembly Packaging Total direct labor Direct costs $ 753,000 993,000 $1,746,000 $3,249,000 $ 606,000 366,000 $ 972,000 $3,378,000 Overhead $ 186,000 37,500 25,500 $ 906,000 363,000 123,000 Assembly building Assembling (@ $30 per mh) Setting up machine (@$900 per setup hour) Handling material (@ $3,000 per run) Packaging building Inspecting and Packing (@ $5 per direct labor-hour) Shipping (@ $1,320 per shipment) Total ABC overhead Total ABC cost Number of units Unit cost 306,000 135,000 $ 690,000 $3,939,000 103,000 $ 38.24 117,000 270,000 $1,779,000 $5,157,000 41,500 $ 124.27 Required: Compute the amount of overhead allocated to the J25P and the J40X cameras for the first quarter using activity-based costing. Assume that all events are the same in the first quarter as in the third quarter except for the number of setup hours. Assume the cost of a setup hour remains at $900. Total ABC Overhead J25P J40X Cathy, the manager of Cathy's Catering, Inc., uses activity-based costing to compute the costs of her catered parties. Each party is limited to 20 guests and requires 5 people to serve and clean up. Cathy offers two types of parties, an afternoon picnic and an evening formal dinner. The breakdown of the costs follows: Activities (and cost drivers) Advertising (parties) Planning (parties) Renting equipment (parties, guests) Obtaining insurance (parties) Serving (parties, servers) Preparing food (guests) Afternoon Picnic $ 113 per party $ 56 per party $ 53 per party plus $ 11 per guest $ 235 per party $ 53 per server per party $ 15 per guest Formal Dinner $ 113 per party $ 104 per party $ 66 per party plus $ 21 per guest $400 per party $ 68 per server per party $ 33 per guest Per party costs do not vary with the number of guests. Required: a. Compute the cost of a 20-guest afternoon picnic. Afternoon picnic b. Compute the cost of a 20-guest evening formal dinner. Evening formal dinner c. How much should Cathy charge for each guest for each type of party if she wants to cover her costs? (Round your answers to 2 decimal places.) Afternoon picnic Formal dinner Charging Amount per guest per guest After reviewing the new activity-based costing system that Janis McGee has implemented at Joplin Industries's Port Arthur manufacturing facility, Kris Kristoff, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 103,000 units of J25P and 41,500 units of J40X in the first quarter. He believes that with his more efficient setup routine, he can reduce the number of setup hours for both the J25P and the J40X products by 28 percent. J40X J25P $1,503,000 Direct material Direct labor $2,406,000 Assembly Packaging Total direct labor Direct costs $ 753,000 993,000 $1,746,000 $3,249,000 $ 606,000 366,000 $ 972,000 $3,378,000 Overhead $ 186,000 37,500 25,500 $ 906,000 363,000 123,000 Assembly building Assembling (@ $30 per mh) Setting up machine (@$900 per setup hour) Handling material (@ $3,000 per run) Packaging building Inspecting and Packing (@ $5 per direct labor-hour) Shipping (@ $1,320 per shipment) Total ABC overhead Total ABC cost Number of units Unit cost 306,000 135,000 $ 690,000 $3,939,000 103,000 $ 38.24 117,000 270,000 $1,779,000 $5,157,000 41,500 $ 124.27 Required: Compute the amount of overhead allocated to the J25P and the J40X cameras for the first quarter using activity-based costing. Assume that all events are the same in the first quarter as in the third quarter except for the number of setup hours. Assume the cost of a setup hour remains at $900. Total ABC Overhead J25P J40X Cathy, the manager of Cathy's Catering, Inc., uses activity-based costing to compute the costs of her catered parties. Each party is limited to 20 guests and requires 5 people to serve and clean up. Cathy offers two types of parties, an afternoon picnic and an evening formal dinner. The breakdown of the costs follows: Activities (and cost drivers) Advertising (parties) Planning (parties) Renting equipment (parties, guests) Obtaining insurance (parties) Serving (parties, servers) Preparing food (guests) Afternoon Picnic $ 113 per party $ 56 per party $ 53 per party plus $ 11 per guest $ 235 per party $ 53 per server per party $ 15 per guest Formal Dinner $ 113 per party $ 104 per party $ 66 per party plus $ 21 per guest $400 per party $ 68 per server per party $ 33 per guest Per party costs do not vary with the number of guests. Required: a. Compute the cost of a 20-guest afternoon picnic. Afternoon picnic b. Compute the cost of a 20-guest evening formal dinner. Evening formal dinner c. How much should Cathy charge for each guest for each type of party if she wants to cover her costs? (Round your answers to 2 decimal places.) Afternoon picnic Formal dinner Charging Amount per guest per guest