Drab Dog Collars uses activity-based costing.

Drab's

system has the following features:

Each collar has

two

parts, direct materials cost is

$10.00

per collar, and direct labor cost is

$2.00

per collar. Suppose Animal Hut has asked for a bid on

45,000

dog collars.

Drab

will issue a total of

200

purchase orders if Animal Hut accepts

Drab's bid.

Requirement 1. Compute the total cost

Drab

will incur to purchase the needed materials and then assemble and package

45,000

dog collars. Also, compute the cost per collar. (Round the total cost to the nearest dollar and the cost per collar to the nearest cent.)

Drab Dog Collars uses activity-based costing. Drab's system has the following features: (Click the icon to view the data table.) Each collar has two parts, direct materials cost is $10.00 per collar, and direct labor cost is $2.00 per collar. Suppose Animal Hut has asked for a bid on 45,000 dog collars. Drab will issue a total of 200 purchase orders if Animal Hut accepts Drab's bid. Read the requirements Requirement 1. Compute the total cost Drab will incur to purchase the needed materials and then assemble and package 45,000 dog collars. Also compute the cost per collar. (Round the total cost to the nearest dollar and the cost per collar to the nearest cent.) - X Data Table Requirements Total manufacturing cost Allocation Base Activity Purchasing Assembling Packaging Predetermined Overhead Allocation Rate $60.00 per purchase order 0.36 per part 0.23 per collar Number of purchase orders Number of parts Number of finished collars Manufacturing cost per collar 1. Compute the total estimated cost Drab will incur to purchase the needed materials and then assemble and package 45,000 dog collars. Also compute the cost per collar. 2. For bidding, Drab adds a 25% markup to total cost. What total price will the company bid for the entire Animal Hut order? 3. Suppose that instead of an ABC system, Drab has a traditional product costing system that allocates indirect costs at the rate of $9.40 per direct labor hour. The dog collar order will require 13,000 direct labor hours. What total price will Drab bid using this system's total cost? 4. Use your answers to Requirements 2 and 3 to explain how ABC can help Drab make a better decision about the bid price it will offer Animal Hut. Print Done Print Done