Backflush Costing, Conversion Rate Southward Company has implemented a JIT flexible manufacturing system. John Richins, controller of the company, has decided to reduce the accounting requirements given the expectation of lower Inventories. For one thing, he has decided to treat direct labor cost as a part of overhead and to discontinue the detailed direct labor accounting of the past. The company has created two manufacturing cels each capable of producing a family of products: the radiator cell and the water pump cell. The output of both cells is sold to a sister division and to customers who use the radiators and water pumps for repair activity, Product-level overhead costs outside the cells are assigned to each cell using appropriate drivers. Facility-level costs are allocated to each cell on the basis of square footage. The budgeted direct later and overhead costs are as follows: Radiator Cell Water Pump Cell Direct labor costs Direct overhead Product sustaining Facility level Total conversion cost $145,440 $83,160 646,400 342,720 242,400 90,720 90,720 141,400 $1,175,640 $607,320 The predetermined conversion cost rate is based on available production hours in each cell. The radiator cell has 40,400 hours available for production, and the water pump cell has 25,200 hours. Conversion costs are applied to the units produced by multiplying the conversion rate by the actual time required to produce the units. The radiator cell produced 73,500 units, taking 0.50 hour to produce une unit of product (on average). The water pump cell produced 84,900 units, taking 0.25 hour to produce one unit of product (on average). Other actual results for the year are as follows: Direct materials purchased and issued Direct labor costs Overhead i $1,533,000 228,600 1,554,360 All units produced were sold. Any conversion cost variance is closed to Cost of Goods Sold Required: 1. Calculate the predetermined conversion cost rates for each cell. If required, round your answers to the nearest cent. Radiator Cell Water Pump Cel per hour per hour Check My Work Previous Next Email Instructor Save and Ext Submit Assignment for Gra