Exercise 7-7 Eric Parker has been studying his department's profitability reports for the past six months. He has just completed a managerial accounting course and is beginning to question the company's approach to allocating overhead to products based on machine hours. The current department overhead budget of $920,520 is based on 43,500 machine hours. In an initial analysis of overhead costs, Eric has identified the following activity cost pool:s Cost Pool Product assembly Machine setup and calibration Product inspection Raw materials storage Expected Cost Expected Activities $387,150 320,950 126,380 86,040 920,520 43,500 Machine hours 2,450 setups 1,420 batches 478,000 pounds (a) Calculate the company's overhead rate based on machine hours (Round answer to 2 decimal places, e.g. 15.25.) Overhead rate $ / MH (b) Calculate the company's overhead rates using the proposed activity- based costing pools. (Round answers to 2 decimal places, e.g. 15.25.) Product assembly Machine setup and calibration$ Product inspection Raw materials storage / MH / setup / batch