mine the activity rate for each activity o nearest cent. Determi ne the total and per-unit activity cost for all three products. Round to nearest Wh y aren't the activity unit costs equal across all three products since they require the same machine time per unit? obi. 5 PR 18-5A Allocating selling and administrative expenses using oup ons, 00) activity-based costing Arctic Air Inc. ma sold for each unit are as follows: nufactures cooling units for commercial buildings. The price and cost of Price Cost of goods sold Gross profit $60,000 per unit 28,000 $32000 per unit AIE In addition, the company incurs selling and administrative expenses of $226,250. The company wishes to assign these costs to its three maior customers, Gough Industries, Breen Inc., and The Martin Group. These expenses are related to three major nonmanufacturing activities: customer service, project bidding, and engineering support. The engineering support is in the form of engineering changes that are placed by the customer to change the design of a product. The budgeted activity costs and activity bases associated with these activities are: Budgeted Activity Cost Activity Customer service Project bidding Engineering support Activity Base 31,500 74,000 120,750 $226,250 Number of service requests Number of bids Number of customer design changes Total costs Activity-base usage and unit volume information for the three customers is as follows: Gough Industries 36 50 18 30 The Martin Group 116 95 108 Breen Inc. Number of service requests Number of bids Number of customer design changes Unit volume Total 180 185 161 50 35 16 Instructions 1. Determine the activity rates for each of the three nonmanufacturing activity pools. 2. Determine the activity costs allocated to the three customers, using the activity rates in () 3. Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity costs in (2). The reports should disclose the gross profit and income from operations associated with each customer. 4. Provide recommendations to management, based on the profitability reports in G)