Kitchen Supply, Inc. (KSH). 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 Recommended Estimated Estinted cost Activity Cost Driver Cost Driver Activity Processing orders Nunber of orders $ 48,630 200 orders Setting up production Number of production runs 2e9,689 110 runs Handling materials Pounds of materials used 380,000 120,000 pounds Machine depreciation and maintenance Machine-hour's 240,000 12,000 hours Performing quality control Nunber of inspections 54,400 40 Inspections Packing Number of units 94,000 470,000 units Total estimated cost $945, 420 In addition, management estimated 7700 direct labor-hours for year 2 Assume that the following cost driver volumes occurred in January, year 2 Institutional Standard Silver Number of units produced 59,690 27.ee 10,000 Direct materials costs $40,000 $22,eee $15,000 Direct labor-hours 410 550 Number of orders 11 10 5 Nunber of production runs 5 Pounds of material 15.ee 7.000 2,900 Machine-hours 590 70 Number of Inspections Units shipped 59,000 27. eee 10,000 470 3 130 4 3 a. Actual labor costs were $16 per hour. Required: (1) Conpute 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 productioh 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)