In: Accounting
Corbett 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:
Estimated |
Estimated Quantity |
|||
Activity |
Indirect Costs |
Allocation Base |
of Allocation Base |
|
Materials handling |
$96,000 |
Number of kilos |
24,000 |
kilos |
Packaging |
210,000 |
Number of machine hours |
3,000 |
hours |
Quality assurance |
114,000 |
Number of samples |
1,900 |
samples |
Total indirect costs |
$420,000 |
Actual production information includes the? following:
Commercial Containers |
Travel Packs |
|||
Units produced |
3,200 |
containers |
51,000 |
packs |
Weight in kilos |
12,800 |
5,100 |
||
Machine hours |
2,400 |
510 |
||
Number of samples |
640 |
765 |