Can someone please help me with this problem: The following data is provided;


The International BlowN Manufacturing Company produces two products. One is a handblown glass designed for decorational purposes . The other product is a machine produced glass used in making Vases. Most of the sales come from the hand blown product, but recently sales of the machine product have been increasing. The following information relates to the products for the most recent fiscal year:

Handblwn MachineBlown
Sales and production (units) 1200 800
Sales price $980 $650
Labor hour required per unit 6 9
Machine hour required per unit 5 7
Unit costs:
Direct materials $209 $255
Direct labor $85 $85
Variable overhead $70 $90

Current cost accounting system allocates:
Fixed overhead related to labor hours $36,300
Fixed overhead related to machine hours $31,500

Cost pool Cost driver Total amount Handblwn Machine Blown
Equipment Machine hours $ 45,000 1,100 300
Material order Number of orders 16,500 475 150
Machine setups Number of setups 15,300 216 70
Quality control Number of inspection 6,000 25 5

1. Calculate the manufacturing overhead rate based on labor hours and machine hours.

2. Determine the cost of manufacturing one unit of each model under the current costing system

3. Determine the cost of manufacturing one unit of each model under the activity-based costing system.

4. Is the Handblwn kit as profitable as the company may think it is based on its present system

5. What should International Blwn company do to improve its profitability.