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2 . An intern suggested that the company use activity - based costing to cost its products. A team was formed to investigate this idea,

2. An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea, and it came back with the recommendation that four activity cost pools be used. These cost pools and their associated activities follow:
Activity Cost Pool and
Activity Measure Estimated
Overhead
Cost Activity
Luxury Standard Total
Purchase orders (number of orders) $ 509,0881,0001,4002,400
Rework requests (number of requests)308,4008001,2002,000
Product testing (number of tests)1,023,3605,0007,00012,000
Machine related (machine hours)3,616,00015,00025,00040,000
$ 5,456,848
Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools.
3. Assume that actual activity is as expected for the year. Using activity-based costing, do the following:
a. Determine the total amount of overhead that would be applied to each model for the year. (Do not round intermediate calculations and round your final answers to nearest whole dollar amount.)
b. Compute the unit product cost for one unit of each model. (Do not round intermediate calculations and round your answers to 2 decimal places.)

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