Addy Company has two products: A and B. The annual production and sales of Product A is 1,700 units and of Product B is 1,100 units. The company has traditionally used direct labour hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labour hours per unit, and Product B requires 0.6 direct labour hours per unit. The labour rate per hour is $20. The Direct material cost per unit of Product A is $45 and for Product B is $78. The total estimated overhead for next period is $98,785.

The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three factory overhead activity cost poolsActivity 1, Activity 2, and General Factorywith estimated overhead costs and expected activity as follows:

	Estimated
Activity	Overhead	Expected Activity
Cost Pool	Costs	Product A	Product B		Total
Activity 1	$30,528	1,000	600		1,600
Activity 2	$17,385	1,700	200		1,900
General Factory	$50,872	510	660		1,170
Total	$98,785

(Note: The General Factory activity cost pool's costs are allocated on the basis of direct labour hours.)

4. The predetermined overhead rate under the traditional costing system is closest to which of the following?

A) $84.43.

B) $19.08.

C) $43.48.

D) $ 9.15.

5. The overhead cost per unit of Product B under the traditional costing system is closest to which of the following?

A) $ 5.49.

B) $11.45.

C) $50.66.

D) $26.09.

6. The predetermined overhead rate (i.e., activity rate) for Activity 2 under the activity-based costing system is closest to which of the following?

A) $ 86.93.

B) $ 9.15.

C) $10.23.

D) $51.99.

7. The overhead cost per unit of Product B under the activity-based costing system is________________. (3 marks)

8. The total cost per unit of Product B under the activity-based costing system is_________________. (3 marks)