Helpful Division of X Company makes two products, Small and Large. The company has always used Conventional Costing (for financial reporting purposes), but this period wants to try using Activity-Based Costing to make better decisions. Information related to the current period is as follows: Small Large Number of Units to manufacture 54,000 units 4,000 units Number of Moves (related to moving overhead) 5,400 moves 14,000 moves Number of Machine Hours (related to assembly) 540 hours 3,000 hours Number of Inspections (related to quality assurance) 810 inspections 400 inspections Relevant Dollar Amounts: Yet to Allocate Direct material costs (traceable) $756,000 $128,000 Direct labor costs (traceable) $81,000 $16,000 Materials Movement Overhead $98,000 Assembly and Packaging Overhead $209,000 Quality Assurance Overhead $127,000

REQUIRED:

1. Since the company has three activities, what are the three overhead application rates the company would use for activity-based costing?(ROUND EACH RATE TO THE NEAREST CENT and be sure to label the rates appropriately.)

2. Using activity-based costing, what was the cost to manufacture one small unit?

3. Using activity-based costing, what was the cost to manufacture one Large unit?

4. Based on what you learned about activity-based costing this week, how might Helpful Division managers use the new cost information from its activity-based costing system to better manage its operations?