For many years, Zapro Company manufactured a single product called a mono-relay. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called a bi-relay that has become increasingly popular. The bi-relay is a more complex product, requiring one hour of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The mono-relay requires only 0.75 hour 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 bi-relay, profits have been declining steadily. Management is beginning to believe that there may be a problem with the company's costing system. Material and labor costs per unit are as follows: Mono-Relay Bi-Relay Direct materials $ 35 $ 48 Direct labor (0.75 hours @ $12 per hour and 1.0 hours @ $12 per hour) $ 9 $ 12 Management estimates that the company will incur $1,000,000 in manufacturing overhead costs during the current year and 40,000 units of the mono-relay and 10,000 units of the bi-relay will be produced and sold. 7. value: 5 points Requirement 1: Compute the predetermined manufacturing overhead rate assuming that the company continues to apply manufacturing overhead cost on the basis of direct labor-hours. Using this rate and other data from the problem, determine the unit product cost of each product. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Predetermined manufacturing overhead rate $ per DLH Unit product cost of Mono-Relay $ Unit product cost of Bi-Relay $ Check My WorkeBook Links (3)References Worksheet Learning Objective: 03-3 Learning Objective: 03-2 Learning Objective: 03-4 8. value: 5 points Requirement 2: Management is considering using activity-based costing to apply manufacturing overhead cost to products for external financial reports. The activity-based costing system would have the following four activity cost pools: Activity Cost Pool Activity Measure Estimated Overhead Cost Maintaining parts inventory Number of part types $ 180,000 Processing purchase orders Number of purchase orders 90,000 Quality control Number of tests run 230,000 Machine related Machine-hours 500,000 $ 1,000,000 Expected Activity Activity Measure Mono-Relay Bi-Relay Total Number of part types 75 150 225 Number of purchase orders 800 200 1,000 Number of tests run 2,500 3,250 5,750 Machine-hours 4,000 6,000 10,000 Determine the activity rate (i.e., predetermined overhead rate) for each of the four activity cost pools. (Omit the "$" sign in your response.) Activity Cost Pool Activity Rate Maintaining inventory $ per part type Processing purchase orders $ per order Quality control $ per test Machine-related $ per MH Check My WorkeBook Links (3)References Worksheet Learning Objective: 03-3 Learning Objective: 03-2 Learning Objective: 03-4 9. value: 5 points Requirement 3: Using the activity rates you computed in Requirement 2 above, do the following (a) Determine the total amount of manufacturing overhead cost that would be applied to each product using the activity-based costing system. After these totals have been computed, determine the amount of manufacturing overhead cost per unit of each product. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Overhead per unit of Mono-Relay $ Overhead per unit of Bi-Relay $ (b) Compute the unit product cost of each product. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Unit product cost for Mono-Relay $ Unit product cost for Bi-Relay $