Kitchen Supply, Inc. (KSI). 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 Cost Driver Number of orders Number of production runs Pounds of materials used Machine-hours Number of inspections Number of units Estimated Cost $ 46,eee 198, 980 390,eee Estimated cost Driver Activity 200 orders 110 runs 130,00 pounds Activity Processing orders Setting up production Handling materials Machine depreciation and maintenance Performing quality control Packing Total estimated cost 220,wee 46,280 96,00 $996, 200 11,eee hours 35 inspections 480,000 units In addition, management estimated 8.000 direct labor-hours for year 2. Assume that the following cost driver volumes occurred in January, year 2. Standard 23, eee $ 25, eee 430 Number of units produced Direct materials costs Direct labor-hours Number of orders Number of production runs Pounds of material Machine-hours Number of inspections Units shipped Institutional 60,000 $49, eee 480 14 3 14. Bee 570 2. 60,000 Silver 9,000 $17,000 570 7 6 2,800 100 3 9,000 3 5.ee 130 2 23, eee Actual labor costs were $15 per hour. Required: (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 (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. Reg A1 Reg A2 Reg B Reg C Compute a predetermined rate for year 2 using direct labor-hours as the allocation base. (Round your answer to 2 decimal places.) Predetermined rate per direct labor-hour Reg A1 Reg A2 Reg B Reg C 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.). *******111111111 Account Institutional S 40,000 Standard S 25.000 Silver 17,000 Total 82,000 Direct materials S S 0 Direct labor Indirect costs 0 Total cost S 40,000 $ 25,000 17,000 $ 82,000 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 Total Institutional S 40,000 Standard S 25,000 Silver 17,000 S S 82.000 0 0 0 Direct materials Direct labor Indirect costs Processing orders Setting up production Handling materials Using machines Performing quality control Packing Total cost 0 0 0 0 82.000 S 40.000 S 25,000 S 17.000 S