Can you provide the steps on how to solve?

Deluxe deck chair:2000 units x 5 DLHs per unit......... 10,000

Tourist deck chair:10,000 units x 4 DLHs per units........... 40,000

Total Direct Labor Hours 50,000

Deluxe Tourist

Direct Materials $25 $17

Direct Labor ($12 per DLH) $60 $48

Estimated Expected Activity

Activities and Activity Measures Overhead Deluxe Tourist TOTAL

Labor related (direct labor hours) $80,000 10,000 40,000 50,000

Machine setups (number of setups) 150,000 3,000 2,000 5,000

Parts administration (number of parts) 160,000 50 30 80

Production orders (number of orders) 70,000 100 300 400

Material receipts (number of receipts) 90,000 150 600 750

General factory (machine-hours) 250,000 12,000 28,000 40,000

Total Estimated Overhead $800,000

a) Compute a predetermined overhead rate based on the information provided.Assume the company

applies overhead on the basis of direct labor hours.

b) Compute the total product cost for both the deluxe and tourist models using the predetermined

overhead rate you calculated in part (a).

c) Assume the company uses activity-based costing (ABC).Compute the activity rate (overhead rate)

for each of the activities identified above.

d) Using the overhead activity rates computed in [c], determine overhead applied to each product

using ABC.

e) Based on the overhead rate computed in (d), determine the product cost for each product using ABC.