7.8 and 7.9 are my last two questions for this weeks homework and I just don't understand how to figure these out... thank you!
b. Calculate the company's overhead rates using the proposed activity-based costing pools. 7.8 (LO 2) Calculating product costs using activity-based costing (CIMA adapted) Wieters Industries manufactures several products including a basic case for a popular smartphone. The company is considering adopting an activity-based costing approach for setting its budget. The company's produc- tion activities, budgeted activity costs, and cost drivers for the coming year are as follows. Cost Driver Activity Activity Overhead $ Cost Driver Quantity Machine setup $ 200,000 # of setups 2,500 Inspection 160,000 # of quality tests 400 Materials receiving 252,000 # of purchase orders 3,000 The budgeted data for smartphone case production are as follows. Direct materials $1.25 per unit Direct labor $0.80 per unit Number of setups 260 Number of quality tests 75 Number of purchase orders 50 Production 250,000 units Required a. Calculate the activity rate for each cost pool. b. Calculate the activity-based unit cost of the smartphone case. 7.9 (LO 2) Allocating overhead to products using activity-based costing Refer to the data in exercise 7.7. Eric Parker is taking the next step in his exploration of activity-based costing and wants to examine the overhead costs that would be allocated to two of the department's four products. He has gathered the following budget information about each product. Driver Usage Component 3F5 Component T76 Machine hours 1,000 10,000 Setups 60 30 Batches 30 8 Pounds of raw materials 20,000 20,000 Required a. Calculate the total overhead allocated to each component under the traditional method using machine hours as the overhead application base. b. Calculate the total overhead allocated to each component under activity-based costing. c. What can you conclude about the costs of the other two products? 7.10 (LO 2) Calculating product costs using traditional and activity-based costing Refer to the data in exercises 7.7 and 7.9. Eric Parker found that the budget included production of 500 units of Com