For many years, Thomson Company manufactured a single product called LEC $40.$ Then three years ago, the company

automated a portion of its plant and at the same time introduced a second product called LEC $90$ that has become

increasingly popular. The LEC $90$ is a more complex product, requiring $0\mathrm{.}80$ hours of direct labor time per unit to

manufacture and extensive machining in the automated portion of the plant. The LEC $40$ requires only $0\mathrm{.}40$ hours of direct

labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to

products on the basis of direct labor$-$hours.

Despite the growing popularity of the company's new LEC $90,$ profits have been declining steadily. Management is

beginning to believe that there may be a problem with the company's costing system. Direct material and direct labor

costs per unit are as follows:

Management estimates that the company will incur $$912,000$ in manufacturing overhead costs during the current year and

$60,000$ units of the LEC $40$ and $20,000$ units of the LEC $90$ will be produced and sold.Problem $4-16($Static$)$ Part $2$

Management is considering using activity$-$based costing to assign manufacturing overhead cost to products. The activity$-$based

costing system would have the following four activity cost pools:

Determine the activity rate for each of the four activity cost pools.Problem $4-16($Static$)$ Part $3$

Using the activity rates you computed in part $(2),$ do the following:

a$.$ Determine the per unit amount of manufacturing overhead cost that would be assigned to each product using the activity$-$based

costing system.

b$.$ Compute the unit product cost of each product.

Complete this question by entering your answers in the tabs below.

Using the activity rates you computed in part $(2),$ determine the per unit amount of manufacturing overhead cost that would

be assigned to each product using the activity$-$based costing system. $($Round your answers to $2$ decimal places.$)$

Manufacturing overhead per unit of LEC $40$

Manufacturing overhead per unit of LEC $90$