Doyle Corporation manufactures two products, Product S and Product W. Product W is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product W. Product W is the more complex of the two products, requiring 3 hours of direct labor time per unit to manufacture compared to 2 hours of direct labor time for Product S. Product W is produced on an automated production line.
Overhead is currently assigned to the products on the basis of direct-labor-hours. The company estimated it would incur $1,025,875 in manufacturing overhead costs and produce 14,500 units of Product W and 58,000 units of Product S during the current year. Unit cost for materials and direct labor are:
	Product S	Product W
Direct material	$17	$25
Direct labor	11	22
Required:
a. Compute the predetermined overhead rate under the current method of allocation and determine the unit product cost of each product for the current year. (Round predetermined overhead rate to two decimal places and then unit product cost to two decimal places.) show your work -
b. The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below. Using this data and an activity-based costing approach, determine the activity rate for each cost pool and the unit product cost of each product for the current year. Show your work -
What conclusions can you draw based on the unit product cost calculated in a and b?
Activity Cost Pool	Total Cost	Total Activity
		Product S	Product W	Total
Machine setups required	$473,150	1,550	2,100	3,650
Purchase orders issued	55,375	560	175	735
Machine-hours required	247,650	7,650	11,150	18,800
Maintenance requests issued	252,600	680	890	1,570
	$1,028,775