After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey decides to analyze overhead cost at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of the companys overhead. Additional information about overhead follows.

Activity	Budgeted Cost	Budgeted Activity Usage
Set up	$ 20,000	25	setups
Inspection	7,500	5,000	parts inspected
Utilities	10,000	5,000	machine hours (MH)
Total	$ 37,500

The following data pertain to Job 615.

Direct materials	$ 2,500
Direct labor	$ 3,500
Overhead	$ ______
Setups	2	setups
Parts inspected	400	parts inspected
Machine hours	600	machine hours

Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615.

Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615 . Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615 . (Round "Overhead rate" to 2 decimal places.) Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. (Round "Activity Rate" to 2 decimal places.) b. Allocate overhead to Job 615 based on actual activity usage c. Total product cost of Job 615 based on activity-based costing