Garfield Company makes pet backpacks. Data concerning the company's two product lines are as follows;

	Deluxe		Standard
Direct materials	$75.00		$30.00
Direct labor	$32.00		$16.00
DLH per unit	4.0 DLH		2.0 DLH
Estimated production	1,000 units		8,000 units

The company has a traditional costing system in which manufacturing overhead is applied to products based on direct labor hours. The estimated manufacturing overhead and direct labor hours for the upcoming year are:

Manufacturing overhead	$168,000
Estimated direct labor hours	20,000 DLHs

1. Determine the predetermined overhead rate based on direct labor hours.

2. Determine the unit product costs of the Deluxe and Standard backpacks using the company's traditional costing system.

3. The company is considering using Activity Based Costing with the following three activity cost pools and activity measures. Determine the predetermined ABC overhead rates for each of the three activity cost pools.

Activity Cost Pools		Activity Measure		Estimated OH Cost
Supporting DL		DLHs		$ 80,000
Batch setups		Number of setups		$ 40,000
Safety testing		Number of tests		$ 48,000
				$168,000

Activity Measure		Deluxe	Standard	Total
DLHs		4,000	16,000	20,000
Number of setups		10	15	25
Number of tests		50	10	60

4. Determine the unit product costs of the Deluxe and Standard Backpacks using the ABC costing system.