Glass Mountain Vases is reviewing two vase product lines, Tall & Short. For these two products they allocate the costs using one single overhead rate based on estimated machine hours.

GMV doesn't believe the tall & short vases are being costed accurately and therefore decides to investigate switching to an Activity Based Costing System. The controller performs significant analysis and determines the following costs activities and cost drivers:

Activity Activity Driver Estimated activity cost Volume of activity measure

Purchasing Quantity bought 225,000 100,000kg

Machine set up Number of set ups 450,000 200 set ups

Oven firing Oven hours 600,000 25,000 hrs

The following data is used for GMV for November

Short Tall

Purchasing materials 2000kg 4000kg

Machine set ups 22 set ups 5 set ups

Oven firings 1000hrs 1000hrs

1. Calculate the budgeted indirect cost rate for the three cost pools
2. Calculate the manufacturing overhead cost for each product
3. Assuming the following additional costs, what is the total cost of the two products

Short Tall

Direct Materials $50 $65

Direct Labour $75 $33