Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows:

Indirect Labor $$507,000$

Cutting Department $$156,000$

Finishing Department $$192,000$

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Total $$855,000$

The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows:

Activity Budgeted Activity Cost Activity Base

Production control $$237,000$ Number of production runs

Materials handling $$270,000$ Number of moves

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Total $$507,000$

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The activity$-$base usage quantities and units produced for the two products follow:

Number of Number of Direct Labor Direct Labor Units

Production moves Hrs cutting Hrs Finishing Produced

Runs

Snowboards $4305,0004,0002,0006,000$

Skis $702,5002,0004,0006,000$

Total $5007,5006,0006,00012,000$

$1.$ Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is $$315,000$ and $$540,000$ for the Cutting and Finishing departments, respectively.

$2.$ Determine the total and per$-$unit factory overhead costs allocated to each product, using the multiple production department overhead rates in $(1).$

$3.$ Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments.

$4.$ Determine the total and per$-$unit cost assigned to each product under activity$-$based costing.

$5.$ Explain the difference in the per$-$unit overhead allocated to each product under the multiple production department factory overhead rate and activity$-$based costing methods.