Willitte 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: E (Click the icon to view the information.) Read the requirements. Requirement 1. Willitte's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $81.50 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: mfg. = manufacturing. Round dollar amounts to two decimal places.) = Indirect cost per unit Allocated mfg. OH cost Number of units Commercial containers Data Table Estimated Estimated Quantity of Allocation Base Activity Indirect Costs Allocation Base Materials handling 95,000 Number of kilos 19,000 kilos Packaging 200,000 Number of machine hours 5,000 hours 112,500 Number of samples Quality assurance 1,875 samples Total indirect costs 407,500 Actual production information includes the following: Commercial Containers Travel Packs Enter any number in the edit fields and then click Check Answer. Units produced 2,400 containers 50,000 packs Weight in kilos 9,600 5,000 Help Me Solve This eText Pages Get More Help - Machine hours 1,680 500 Number of samples 240 750
Willitte 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: E (Click the icon to view the information.) Read the requirements. Requirement 1. Willitte's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $81.50 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: mfg. = manufacturing. Round dollar amounts to two decimal places.) = Indirect cost per unit Allocated mfg. OH cost Number of units Commercial containers Data Table Estimated Estimated Quantity of Allocation Base Activity Indirect Costs Allocation Base Materials handling 95,000 Number of kilos 19,000 kilos Packaging 200,000 Number of machine hours 5,000 hours 112,500 Number of samples Quality assurance 1,875 samples Total indirect costs 407,500 Actual production information includes the following: Commercial Containers Travel Packs Enter any number in the edit fields and then click Check Answer. Units produced 2,400 containers 50,000 packs Weight in kilos 9,600 5,000 Help Me Solve This eText Pages Get More Help - Machine hours 1,680 500 Number of samples 240 750
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Willitte 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:
E (Click the icon to view the information.)
Read the requirements
Requirement 1. Willitte's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $81.50 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: mfg. = manufacturing. Round dollar amounts to two decimal places.)
Allocated mfg. OH cost
Number of units
= Indirect cost per unit
Commercial containers
Data Table
Estimated Quantity of
Allocation Base
Estimated
Activity
Indirect Costs Allocation Base
Materials handling
$4
95,000 Number of kilos
19,000 kilos
Packaging
200,000 Number of machine hours
5,000 hours
112,500 Number of samples
Quality assurance
1,875 samples
$
Total indirect costs
407,500
Actual production information includes the following:
Commercial Containers
Travel Packs
Units produced
2,400 containers
50,000 packs
Enter any number in the edit fields and then click Check Answer.
Weight in kilos
9,600
5,000
Help Me Solve This
eText Pages
Get More Help -
Machine hours
1,680
500
Number of samples
240
750
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