2B Business. has three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is 90,000, 162,500, and 35,000, respectively. The expected annual use in each department is 1,000 setups, 12,500 machine hours, and 875 inspections.

1. Identify the predetermined rate
2. Direct Material 20,000, Direct Labor 25,000 , Compute for the Prime Cost and Conversion Cost.