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Question Help Robert Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system would be beneficial: (Click the icon to view the information.) Read the requirements Requirement 1. Robert's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $154.88 per machine hour. Compute the total indirect costs allocated to the commercial containers and to the travel packs under the original system. Then compute the indirect cost per unit for each product. Round to two decimal places. Select the formula, and then enter the amounts to compute the indirect cost per unit for each product. (Abbreviation used: mig. = manufacturing. Round dollar amounts to two decimal places.) Indirect cost per unit Commercial containers Travel packs Requirement 2. Compute the predetermined overhead allocation rate for each activity. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Abbreviation used: qty = quantity. Round your answers to the nearest whole dollar.) Predetermined OH allocation rate Materials handling Packaging Quality assurance Requirement 3. Use the predetermined overhead allocation rates to compute the activity-based costs per unit of the commercial containers and the travel packs. Round to two decimal places. (Hint: First compute the total activity-based costs allocated to each product line, and then compute the cost per unit.) Begin by selecting the formula to allocate overhead (OH) costs. = Allocated mig. overhead costs i Data Table X Compute the total activity-based costs allocated to commercial containers, and then compute the cost per unit for commercial containers. Finally, compute the total activity-based costs allocated to travel packs then compute the cost per unit for travel packs Commercial containers Travel packs Estimated Estimated Quantity of Materials handling Activity Indirect Costs Allocation Base Allocation Base Packaging Materials handling $ 98,000 Number of kilos 24,500 kilos Quality assurance Packaging 209,000 Number of machine hours 2,786 hours Total activity-based costs Quality assurance 124,500 Number of samples 2,075 samples Number of units 131,500 Total indirect costs Activity-based cost per unit Actual production information includes the Requirement 4. Compare the indirect activity-based costs per unit to the indirect costs per unit from the traditional system. How have the unit costs changed? Explain why the costs changed. Commercial Containers Travel Packs Relative to activity-based costing (ABC), the traditional system the commercial containers and the travel packs. Units produced 2,200 containers 56,000 packs Weight in kilos 8,800 5,600 The traditional system allocates overhead costs solely on Activity-based costing (ABC) recognizes that although commercial containers require |machine hours per unit than travel packs, they the same proportion Machine hours 1,760 560 Number of samples 220 840 Print Done Activate Windows