Kitchen Supply, Inc. (KS), manufactures three types of flatware: Institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Book Print D Activity Processing orders Setting up production Handling materials Machine depreciation and maintenance Performing quality control Packing Total estinated cost Recommended Cost Driver Estimated Cost Estimated Cost Driver Activity Number of orders $43,000 200 orders Number of production runs 180,000 100 runs Pounds of materials used 360,000 120,000 pounds Machine-hours 240,000 12,000 hours Number of inspections Number of units 56,250 45 Inspections 96,000 450,000 units 5975,250 ferences In addition, management estimated 7.200 direct labor-hours for year 2 Assume that the following cost driver volumes occurred in January. year 2. Institutional Standard Number of units produced i 62,000 21,000 10,000 Direct materials costs $38,000 $28,000 $18,000 Direct labor-hours 410 578 Number of orders 11 6 Number of production runs 2 Pounds of material 14,000 7,000 3,500 Rachine-hours Number of Inspections 610 4 Units shipped 62,000 150 2 21,000 90 10,000 Actual labor costs were $15 per hour Required: a. (1) Compute a predetermined overhead rate for year 2 for each cost driver using the estimated costs and estimated cost driver units prepared by the consultant (2) Compute a predetermined rate for year 2 using direct labor-hours as the allocation base b. Compute the production costs for each product for January using direct labor-hours as the allocation base and the predetermined rate computed in requirement a(2). c. Compute the production costs for each product for January using the cost drivers recommended by the consultant and the predetermined rates computed in requirement a. (Note: Do not assume that total overhead applied to products in January will be the same for activity-based costing as it was for the labor-hour-based allocation.) Complete this question by entering your answers in the tabs below. Req Al Req Compute the production costs for each product for January using direct labor-hours as the allocation base and the predetermined rate computed in requirement a(2). (Do not round intermediate calculations.) Account institutional Standard Silver Total Direct materials Direct labor Indirect costs $ 38,000 $ 20.000 $ 18.000 $ 84,000 0 Total cost $ 38.000$ 20,000 $ 18.000 $ 0 84.000 ME Grew Kitchen Supply, Inc. (KS), manufactures three types of flatware: Institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Estimated Cost Driver Activity) Activity Recommended Cost Driver Cost Processing orders Number of eders $43,000 Setting up production Number of oduction runs 180,000 200 orders 100 runs Handling eaterials Pounds of 360,000 120,000 pounds Machine dicectation and 240,000 12.000 hours Performing quality control Inspections 56,250 45 inspectio 96,000 480,000 units Total estimated cost In addition, management estimated 7.200 direct labor-hours for year 2 $975,250 Assume that the following cost driver volumes occurred in January, year 2 Standard Number of uniti prodot 2,800 Direct saterials cost $38,000 21,000 $28,000 10,000 $10,000 Direct 410 460 570 11 of production P H Pounds of material 14,000 3,500 Pachine-hours 150 2 Units shipped 62,000 21,000 Actual labor costs were $15 per hour Required a (1) Compute a predetermined overhead rate for year 2 for each cost driver using the estimated costs and estimated cost driver units prepared by the consultant (2) Compute a predetermined rate for year 2 using direct labor-hours as the allocation base b. Compute the production costs for each product for January using direct labor-hours as the allocation base and the predetermined rate computed in requirement a(2) c. Compute the production costs for each product for January using the cost drivers recommended by the consultant and the predetermined rates computed in requirement a (Note: Do not assume that total overhead applied to products in January will be the same for activity-based costing as it was for the labor-hour-based allocation) Complete this question by entering your answers in the tabs below. Red Al Compute the production costs for each product for January using the cost drivers recommended by the consultant and the predetermined rates computed in requirement a. (Note: Do not assume that total overhead applied to products in January will be the same for activity-based costing as it was for the labor-hour-based allocation.) (Do not round intermediate calculations.) Show less Account Institutional Standard Sver Total Direct materials $ 38,000 $ 28.000 $ 18.000 04.000 Direct labor Indirect costs Processing orders Setting up production Handing materials Using machines Performing quality control Packing Total cost 3 300005 28000 $ 18.000 $ 84.000