Rowland Textile Inc. manufactures two products: sweatshirts and T-shirts. The manufacturing process involves two activities: cutting and sewing. Expected overhead costs and cost drivers are as follows:

Required:
1. Calculate the activity-based overhead rates. Use machine hours for the cutting activity and direct labour hours for the sewing activity.
2. Calculate a plantwide overhead rate using direct labour hours as the cost driver.
3. Assume the activities for sweatshirts are as follows:

Calculate the overhead costs allocated to sweatshirts based on the activity-based overhead rates calculated in Requirement 1.
4. Using the assumptions given in Requirement 3, calculate the overhead costs allocated to sweatshirts using the plantwide overhead rate in Requirement 2.

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Cutting $320,000 Sewing Overhead costs Machine hours Direct labour hours $700,000 50,000 800,000 Cutting Sewing Machine hours Direct labour hours 4 4 2.