Erickson Company manufactures wheel rims. The controller expects the following ABC allocation rates for 2016:

Erickson produces two wheel rim models: standard and deluxe. Expected data for 2016 are as follows:

The company expects to produce 500 units of each model during the year.
Requirements
1. Compute the total estimated indirect manufacturing cost for 2016.
2. Compute the estimated ABC indirect manufacturing cost per unit of each model. Carry each cost to the nearest cent.
3. Prior to 2016, Erickson used a direct labor hour single plantwide overhead allocation rate system. Compute the predetermined overhead allocation rate based on direct labor hours for 2016. Use this rate to determine the estimated indirect manufacturing cost per wheel rim for each model, to the nearest cent.

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Predetermined Overhead Allocation Rate 3.00 per part 600.00 per setup 27.00 per part 80.00 per hour Activity Allocation Base Number of parts Number of setups Number of parts Number of finishing hours $ Materials handling Machine setup Insertion of parts Finishing Standard Deluxe Parts per rim Setups per 500 rims Finishing hours per rim Total direct hours per rim 2.0 14.0 2.0 3.0 9.0 14.0 2.5 5.0