ACC207Afer Class Exercise – Chapter 5AcTvity Based CosTngName ______________________________________Due 02/11 by 9 AM.Afer class exercises are to be completed on anINDIVIDUAL BASIS!Ways tosubmit this are to slide it under my door (Webster 217) or email completed word Fle email@example.com.Burn Not Sunscreen company is thinking about using AcTvity Based CosTng.±hey would like to comparethe simple system they are using with an ABC system.Burn Not produces two products, SP²30 andSP²45±he ³ollowing in³ormaTon relates to Burn Not.SP² 30SP² 45Units sold25,00035,000Selling Price$12.00$10.00Direct materials per unit$3.00$2.25Direct Labor cost per unit$1.40$1.50ProducTon runs2027Material moves5059Machine set ups1621Number o³ inspecTons1012Machine hours2,0003,000INDIREC± COS±S:AcTvityAcTvity costAcTvity cost driverProducTon scheduling$30,000ProducTon runsMaterial handling$25,000Material movesAssembly cost$165,000Machine hoursMachine set up$13,000Machine set upsInspecTon$50,000Number o³ inspecTonsUnder the Simple system, the Indirect costs were simply allocated to the product based onmachinehours1.How much is the indirect cost rate per machine hour._________________________2.Calculate the ±O±AL cost o³ the SP² 30 and SP²45 and the unit costunder a simple cost system.SP²30SP²45DM costDL cost²actory overhead±otal Cost/ units sold±otal Cost per unit
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