Exercise 7-4 Compute Activity Rates and Assign to a Cost Object [LO3] MovieTime Corporation produces furniture and fixtures for home theatre installations. John Jones, the owner of the company, recognized a trend in home theatre installations starting about three years ago and began working with local design firms and home builders to offer affordable yet high-quality furnishings for new construction and renovation markets. The company's most popular product is a leather upholstered recliner with a cup holder and snack tray built into each chair's arms. Last year, John decided to implement an ABC system to better understand the overall cost structure and to ensure he was charging competitive prices that would also allow the firm to remain profitable over the longer term. The ABC system is designed to allow direct material and direct labour to be traced directly to each of the company's four main oroducts. The system also includes four activity cost pools for overhead: Quality Control and Inspection, Order Processing. Delivery and Installation, and Other. The activity measures are units produced for Quality Control and Inspection, number of orders for Order Processing, and number of deliveries for Delivery and installation. The Other cost pool has no activity measure. The following costs will assigned using the ABC system: The distribution of resource consumption across the activity cost pools is as follows: The ABC system at MovieTime contains the following activity cost pools and activity rates this year: Activity data have aiso been supplied for the leather recliner product line: 1. Compute the activity rates for the ABC system. 2. Determine the total overhead cost that would be assigned to the leather recliner product line using the ABC system