Aunt Ethel Cookie

Questions:

a)Determine the activity-cost-driver rate for packaging costs (three points).
b)Using the ABC system, for the sugar cookie, compute the estimated overhead costs per 1,000 cookies (three points).
c)Using the ABC system, for the sugar cookie, compute the estimated operating profit per 1,000 cookies (three points).
d)Using a traditional system (with direct labor hours as the overhead allocation base) for the sugar cookie, compute the estimated overhead costs per 1,000 cookies (three points).
e)Using a traditional system (with direct labor hours as the overhead allocation base) for the sugar cookie, compute the estimated operating profit per 1,000 cookies (3 points).
f)Explain the difference between the profits obtained from the traditional system and the ABC system. Which system provides a better estimate of profitability? Why? (three points).