Exercise 4-17 (Static) Using activity-based costing to allocate overhead, compute product cost and gross profit LO P3 Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Process Assembly Activity Machining Setups Budgeted cost $ 279,000 24,000 $ 303,000 Activity Cost Driver Machine hours (MH) Setups Budgeted Activity Usage 6,000 120 $ 210,000 700 Finishing Support Inspecting Purchasing Inspections Purchase orders $ 135,000 450 Additional production information concerning its two models follows. Additional production information concerning its two models follows. Units and Activities Units produced Machine hours Setups Inspections Purchase orders Model X 1,724 1,800 40 400 300 Model Z 3,463 4,200 80 300 150 Per Unit Selling price per unit Direct materials cost per unit Direct labor cost per unit Model X $ 420 100 150 Model Z $ 400 90 160 1. Compute the activity rate for each activity using activity-based costing. 2. Using activity-based costing, compute the overhead cost per unit for each model. 3. Compute the total product cost per unit for each model. 4. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit). Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the activity rate for each activity using activity-based costing. (Round "Activity rate" to 2 decimal places.) Budgeted Cost Budgeted Activity Usage Activity Rate Activity Machining Setups Inspection Purchasing inspections machine hours quired 2 > purchase orders setups Required 1 Required 2 Required 3 Required 4 Using activity-based costing, compute the overhead cost per unit for each model. (Round "Activity Rate" to 2 decimal places and other answers to the nearest whole dollar amount.) Activity Usage Activity Rate Allocated Cost Overhead cost per unit-Model X Activity Machining Setups Inspection Purchasing Total allocated cost Units produced Overhead cost per unit inspections MH orders setups Activity Usage Activity Rate Allocated Cost Overhead cost per unit-Model Z Activity Machining Setups Inspection Purchasing Total allocated cost Units produced Overhead cost per unit Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the total product cost per unit for each model. (Do not round intermediate calculations.) Per Unit Direct Materials Direct Labor Overhead Product Cost per Unit Model X Model Z Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 For each model, compute the gross profit per unit (selling price per unit minus product cost per unit). (Do not round intermediate calculations. Negative amounts should be indicated with a minus sign.) Per Unit Selling Price Product cost per unit Gross Profit Model. X Model Z