Activity-Based Costing and Product Cost Distortion Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Four Finger Appliance presently uses the multiple production department factory overhead rate method. The factory overhead is as follows: Assembly Department $186,000 Test and Pack Department Total 120,000 $306,000 The direct labor information for the production of 7,500 units of each product is as follows: a Screen Shot 2021-02-09 at 12.41.14 AM Search % % % Operating income as a percent of premium revenue Blender Toaster oven Total Assembly Department Test and Pack Department 750 dlh 2,250 dlh 2,250 750 3,000 dlh 3,000 dlh Four Finger Appliance used direct labor hours to allocate production department factory overhead to products. The management of Four Finger Appliance Company has asked you to use activity-based costing to allocate factory overhead costs to the two products. You have determined that $81,000 of factory overhead from each of the production departments can be associated with setup activity ($162,000 in total). Company records indicate that blenders required 135 setups, while the toaster ovens required only 45 setups. Each product has a production volume of 7,500 units. If required, round all per unit answers to the nearest cent. a. Determine the three activity rates (assembly, test and pack, and setup). b. Interpret the report. All three insurance lines have they consume and percentage of underwriting income to premium revenue. The differences among the insurance lines are in the way activities. The insurance line has the profitability because it has frequent claims that require more auditing and disbursement processing than do the other two lines. In addition, the Homeowners line has a much higher rate of cancellation relative to the other two lines (over 50% of new policies). Lastly, the Homeowners line has more premium collections compared to the other two lines. Possibly, the Homeowners line is collected in smaller amounts from more customers than the other two lines. In contrast, the consumes the administrative activities, causing it to be very profitable. The Auto line is in between these two. line Assembly Activity per dlh Test and Pack Activity per dlh Setup Activity $ per setup CI -(