EcoFabrics has budgeted overhead costs of $$1,152,900.$ It has assigned overhead on a plantwide basis to its two products $($wool and cotton$)$ using direct labor hours which are estimated to be $549,000$ for the current year. The company has decided to experiment with activity$-$based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting $($cost driver is machine hours$)$ and design $($cost driver is number of setups$).$ Total estimated machine hours is $244,000,$ and total estimated number of setups is $1,830.$ Overhead allocated to the cutting cost pool is $$439,200$ and $$713,700$ 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,$122,000,,122,000],[$Number of setups,$1,220,,610]]$

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

eTextbook and Media

Determine the amount of overhead assigned to the wool product line and the cotton product line using activity$-$based costing.

$\backslash$table$[[,$Wool product line,,Cotton product line$],[$Overhead Allocated,$$,,$$$,]]$

eTextbook and Media

Calculate the overhead rate using traditional approach. $($Round answer to $2$ decimal places, e$.$g$.12\mathrm{.}25.)$

Overhead rates using the traditional approach $$,$ per direct labor hour

eTextbook and Media

What amount of overhead would be assigned to the wool and cotton product lines using the traditional approach, assuming direct labor hours were incurred evenly between the wool and cotton?

Wool product line

Cotton product line

Overhead Allocated

$

$