Active Works Products is a global manufacturing company specializing in athletic wear and sporting goods. The company decided to adapt an activity based costing system which has five activity cost pools:

Activity Cost Pool	Estimated Overhead Cost	Expected Activity
Labor-related	$28,000	2,000 direct labor hours (DLH)
Purchase orders	$30,000	600 orders
Product testing	$27,200	800 tests
Packaging	$64,600	3800 packages
General Factory	$50,100	2,000 direct labor hours (DLH)

You have been asked to compute the following:

1. Activity rate for each activity cost pool

2. Predetermined overhead rate using the assumption that the company uses a single predetermined overhead rate based on direct labor hours.

3. Write a brief memo to the production supervisor explaining the significance of using direct labor hours as the base for assigning manufacturing overhead costs to products.

Part 1:Activity Rate (round your answers to 2 decimal places)

Part 2:Predetermined Overhead Rate (round your answers to 2 decimal places)