College Supply Company (CSC) makes three types of drinking glasses: short, medium, and tall. It presently applies overhead using a predetermined rate based on direct labor-hours. A group of company employees recommended that CSC switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for Year 5 for each activity center.

Activity	Recommended Cost Driver	Estimated Cost			Estimated Cost Driver Units
Setting up production	Number of production runs	$	24,000		80	runs
Processing orders	Number of orders		48,000		200	orders
Handling materials	Pounds of materials		18,000		9,000	pounds
Using machines	Machine-hours		66,000		11,000	hours
Providing quality management	Number of inspections		48,000		40	inspections
Packing and shipping	Units shipped		40,000		20,000	units
		$	244,000

In addition, management estimated 2,000 direct labor-hours for year 5.

Assume that the following cost driver volumes occurred in February, year 5:

	Short			Medium			Tall
Number of units produced		900			400			400
Direct materials costs	$	3,000		$	3,000		$	2,500
Direct labor-hours		90			100			90
Number of orders		7			8			4
Number of production runs		2			4			8
Pounds of material		300			900			300
Machine-hours		600			300			200
Number of inspections		1			3			2
Units shipped		900			400			300
Required: a. Compute a predetermined overhead rate for year 5 for each cost driver recommended by the employees. Also compute a predetermined rate using direct labor-hours as the allocation base. (Round your answers to 2 decimal places.) c. Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requirement (Note: Do not assume that total overhead applied to products in February will be the same for activity-based costing as it was for the labor-hour-based allocation.) (Do not round intermediate calculations.)

Direct labor costs were $18 per hour.

	Short	Medium	Tall
Direct materials	$3,000	$3,000	$2,500
Direct labor
Setting up production
Processing orders
Handling materials
Using machines
Performing quality management
Shipping
Total costs	$3,000	$3,000	$2,500