Fairfield Mortgage Company is a full$-$service residential mortgage company in the Atlanta area that operates in a very competitive market. The CEO, Richard Sissom, is concerned about operating costs associated with processing mortgage applications and has decided to install an ABC costing system to help him get a handle on costs. Although labor hours seem to be the primary driver of the cost of processing a new mortgage, the labor cost for the different activities involved in processing new loans varies widely. The Accounting Department has provided the following data for the company's five major cost pools for the year:

Activity Cost Pools Activity Drivers

Taking customer applications $$600,000$ Time$-$assistant managers $12,000$ hours

Conducting credit investigations $900,000$ Time$-$credit managers $16,500$ hours

Underwriting $1,050,000$ Time$-$Underwriting Department $10,000$ hours

Preparing loan packages $400,000$ Time$-$Processing Department $8,000$ hours

Closing loans $1,200,000$ Time$-$Legal Department hours $6,000$ hours

$$4,150,00052,500$ hours

During the year, the company processed and issued $5,000$ new mortgages, two of which are summarized here with regard to activities used to process the mortgages:

Loan $5066$ Loan $5429$

Application processing hours $1\mathrm{.}52\mathrm{.}75$

Credit investigating hours $43$

Underwriting hours $2\mathrm{.}54\mathrm{.}75$

Processing hours $3\mathrm{.}53$

Legal processing hours $1\mathrm{.}51\mathrm{.}5$

Total hours $13\mathrm{.}0015\mathrm{.}00$

a$.$ Determine the cost per unit of activity for each activity cost pool.

Round rates to two decimal places.

Activity$-$based overhead rates:

Taking applications

Conducting credit investigations

Underwriting

Preparing loan packages

Closing loans

b$.$ Determine the cost of processing loans $5066$ and $5429.$

Round answers to two decimal places.

Loan $5066$ Loan $5429$

Taking applications

Investigations

Underwriting

Loan packages

Closing loans

Total costs

c$.$ Determine the cost of preparing loans $5066$ and $5429$ assuming that an average cost per hour for all activities is used.

Round answers to two decimal places.

Average cost per hour for all activities $Answer

Use rounded rate calculated above for calculations below. Round answers to two decimal places.

Cost of Loan #$5066$ $Answer

Cost of Loan #$5429$ $Answer