Spin Cycle Company uses three activity pools to apply overhead to its products.

Each activity has a cost driver used to allocate the overhead costs to the product. The activities and related overhead costs are as follows: product design $40,000; machining

$300,000; and material handling $100,000. The cost drivers and expected use are as follows.

Expected Use of Cost Drivers Activities Cost Drivers per Activity Product design Number of product changes 10 Machining Machine hours 150,000 Material handling Number of setups 100

(a) Compute the predetermined overhead rate for each activity.

(b) Classify each of these activities as unit-level, batch-level, product-level, or facility-level.

AppendixLO1