b) Exercise 1: What is the Gross Profit Margin % for the XM2 drive using the ABC system? See circle on the printed exercise- Page 4. Express your answer as a % rounded to one place past the decimal (For example: 68.4%)

4. Allocate overhead costs to the cost object. Use the rates calculated above along with the following breakdowns in activities to allocate overhead costs to each cost object. Calculate a Cost per Unit (round to the nearest cents) Activity Activity Cost Allocation Rate Allocated # of Units Per Unit Setup XM1 30 X $ per setup =$ 1 9,750 $ XM2 20 X $ per setup =$ | 14,475 $ Molding & Assembly XM1 858 X $ per machine hr =$ | 9,750 $ XM2 812 X $ per machine hr =$ | 14,475 $ Engineering XM1 766 X $ per design hr =$ | 9,750 $ XM2 284 X $ per design hr =$ | 14,475 $ Prepare a Gross Profit Margin summary using the new allocations (ABC): XM1 XM2 $89.00 $149.00 38.00 24.00 18.00 27.00 Activity-Based Costing Selling Price per Unit Direct Costs: Direct Materials (per unit) Direct Labor (per unit) Allocated Overhead (ABC) Setup (per unit) Molding & Assembly (per unit) Engineering (per unit) Total Allocated Overhead (per unit) Total Cost per Hard Drive: (per unit) $ Gross Profit Per Unit (Price - Total Cost) $ Gross Profit Margin % (Gross Profit / Price) % % Gross Profit Margin % Summary XM1 XM2 Traditional Costing (from earlier) % % Activity Based Costing (from schedule above) % % Cost Accountant Projections 26.9% 49.8% 4. Allocate overhead costs to the cost object. Use the rates calculated above along with the following breakdowns in activities to allocate overhead costs to each cost object. Calculate a Cost per Unit (round to the nearest cents) Activity Activity Cost Allocation Rate Allocated # of Units Per Unit Setup XM1 30 X $ per setup =$ 1 9,750 $ XM2 20 X $ per setup =$ | 14,475 $ Molding & Assembly XM1 858 X $ per machine hr =$ | 9,750 $ XM2 812 X $ per machine hr =$ | 14,475 $ Engineering XM1 766 X $ per design hr =$ | 9,750 $ XM2 284 X $ per design hr =$ | 14,475 $ Prepare a Gross Profit Margin summary using the new allocations (ABC): XM1 XM2 $89.00 $149.00 38.00 24.00 18.00 27.00 Activity-Based Costing Selling Price per Unit Direct Costs: Direct Materials (per unit) Direct Labor (per unit) Allocated Overhead (ABC) Setup (per unit) Molding & Assembly (per unit) Engineering (per unit) Total Allocated Overhead (per unit) Total Cost per Hard Drive: (per unit) $ Gross Profit Per Unit (Price - Total Cost) $ Gross Profit Margin % (Gross Profit / Price) % % Gross Profit Margin % Summary XM1 XM2 Traditional Costing (from earlier) % % Activity Based Costing (from schedule above) % % Cost Accountant Projections 26.9% 49.8%