Question

Managerial Accounting (ACG 2071E) Spring 2020 (1) kimberly adams & Save Homework: Chapter 19 HW Score: 0 of 1 pt 9 of 9 (8 complete) P19-33A (similar to) HW Score: 78.4%, 7.06 of 9 pts Question Help Gibson 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 PE (Click the icon to view the information.) Read the requirements Requirement 1. Gibson'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 mfg = manufacturing Round dollar amounts to two decimal places) - Indirect cost per unit Choose from any drop-down list and then click Check Answer 11 remaining Check Answer Type here to search o wie W

Answer 1

Requirement-1:

Product:		Total cost	No. of unit	Cost per unit
Commercial	($154.88*1,540)	238515	2200	108.42
Travel	($154.88*560)	86733	56000	1.55

Requirement-2:

Material handling	$98,000/24,500	4.00	per kilo
Packaging	$209,000/2,786	75.02	per hour
QA	$124,500/2,075	60.00	per sample

Requirement-3:

Commercial container:
Material handling cost	(7,700*4.00)	$      30,800
Packaging cost	(1,540*75.02)	115,531
QA	(220*60.00)	13,200
Total indirect costs		159,531
No. of units		2,200
Indirect activity cost per unit		$        72.51
Travel Pack
Material handling cost	(5,600*4.00)	$      22,400
Packaging cost	(560*75.02)	42,011
QA	(840*60.00)	50,400
Total indirect costs		114,811
No. of units		56,000
Indirect activity cost per unit		$           2.05