EcoFabrics has budgeted overhead costs of $$1,143,450.$ It has assigned overhead on a plantwide basis to its two products $($wool and cotton$)$ using direct labor hours which are estimated to be $544,500$ for the current year. The company has decided to experiment with activity$-$based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting $($cost driver is machine hours$)$ and design $($cost driver is number of setups$).$ Total estimated machine hours is $242,000,$ and total estimated number of setups is $1,815.$ Overhead allocated to the cutting cost pool is $$435,600$ and $$707,850$ 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,$121,000,,121,000],[$Number of setups,$1,210,,605]]$

$($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