Formulas: Total Estimated Overhead Cost = Sum of Estimated Overhead Cost for each cost pool. Plantwide Overhead Rate = Total Estimated Overhead Cost Total Expected Direct Labour Hrs Overhead Cost Assignments for Product A = Total DLH for Product A x Plantwide O/H rate Activity rates are different for each cost pool: Activity Rate = Estimated O/H Cost Expected Activity Total overhead for product A = Cost Pool #1: Activity Rate x Expected activity for product A = Amt 1 Cost Pool #2: Activity Rate x Expected activity for product A = Amt 2 Repeat for all cost pools for product A Total overhead cost for product A: Total all amts above QUESTION: Summit Manufacturing Company manufactures two products 24,000 units of Product #1 and 10,000 units of Product #2. The company uses a plantwide overhead rate based on direct labour-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products #1 and #2. Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 350,000 15,000 MH Machine setups Number of setups $ 225,000 400 setups Product design Number of products $ 16,000 2 products General factory Direct labour-hours $ 400,000 11,000 DLHs Product 1 Product 2 Machine-hours 5,000 2,000 Number of setups 55 175 Number of products 1 1 Direct labour-hours 7,500 3,500 Required: 1. What is the companys plantwide-overhead rate? 2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product 1? How much is allocated to Product 2? 3. a) What is the activity rate for the Machining activity cost pool? b) What is the activity rate for the Machine Setups activity cost pool? c) What is the activity rate for the Product Design activity cost pool? d) What is the activity rate for the General Factory activity cost pool? 4. a) Using the ABC system, how much total manufacturing overhead cost would be assigned to Product 1? b) Using the ABC system, how much total manufacturing overhead cost would be assigned to Product 2?