1. Compute Sunflower's indirect cost allocation rate.
2. Compute the total costs assigned to the Wilson and Nanry engagements.
3. Compute the operating income from the Wilson and Ninary engagemants.
Refer to the Sunflower Data Set. List all the signals or clues indicating that Sunflower's cost system may be "broken."
Compute the cost allocation rate for each activity
1. Compute the cost assigned to the Wilson engagement and to the Nanry engagement using the ABC system.
2. Compute the operating income Wilson engagement and to the Nanry engagement using the ABC system.
1. Compute the cost allocation rate for each activity.
2. Using the activity based cost allocation rates to compute the indirect costs of each unit of the commercial containers and the travel packs. (Hint: Compute total activity costs allocated to each product line and then compute the cost per unit.)
3. The company's original single-allocation-based cost system allocated indirect costs to the products at $400 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 costs per unit for each product.
4. Compare the activity-based costs per unit to the costs from the original system. How have the unit costs changed? Explain why the costs changed as they did.