1. ABC Inc manufactures office chairs. Presently the company assigns overhead to each product using direct labor hours to calculate a plantwide rate.

The following information is available for the upcoming years:

Estimated factory overhead	$890,000
Estimated direct labor hours	10,000

The company is considering implementing an activity-based costing system and has identified three activities. Resource drivers are used to assign costs to each activity.

The following information about each activity is available

Activity	Estimated Costs	Cost Drivers	Total Estimated Driver
Material handling	$300,000	Parts	60,000
Assembly	$400,000	Machine hours	50,000
Finishing	$190,000	Direct labor hours	10,000

One of the models that the company produces uses the following resources:

	OC- 16
Parts	24
Machine Hours	4
Direct labor hours	3

Using the above information, answer the following questions.

1. The plantwide predetermined overhead rate using direct labor hours as the cost driver is $________ per direct labor hour.

2. Assume that the actual direct labor hours were 12,000 direct labor hours. If the company uses the plantwide rate, then the total applied overhead would be $_________.

3. Using the plantwide overhead rate, the total overhead applied to one unit of OC-16 is $_________.

4. If the company decided to use activity-based costing, then the overhead rate for Material Handling would be $_______ per part.

5. If the company decided to use activity-based costing, then the overhead rate for Assembly would be $_______per machine hour.

6. If the company decided to use activity-based costing, then the overhead rate for Finishing would be $_______per direct labor hour.

7. Using the activity-based costing system, the total overhead applied for all activities go one unit of OC-16 is $________.