EcoFabrics has budgeted overhead costs of $$1,030,050.$ It has assigned overhead on a plantwide basis to its two products $($wool and cotton$)$ using direct labor hours which are estimated to be $490,500$ for the current year. The company has decided to experiment with activity$-$based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting $($cost driver is machine hours$)$ and design $($cost driver is number of setups$).$ Total estimated machine hours is $218,000,$ and total estimated number of setups is $1,635.$ Overhead allocated to the cutting cost pool is $$392,400$ and $$637,650$ is allocated to the design cost pool. Additional information related to product usage by these pools is as follows.

$\backslash$table$[[,$Wool,,Cotton$],[$Machine hours,$109,000,,109,000],[$Number of setups,$1,090,,545]]$

$($a$1)$

Calculate the overhead rate using activity based costing. $($Round per machine hour to $2$ decimal places, e$.$g$.12\mathrm{.}25.)$

Overhead rates for activity$-$based costing

Cutting $ per machine hour

Design per setup

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