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. Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Activity Processing orders Number of orders $ 45,000 200 orders Setting up production Number of production runs 190,000 100 runs Handling materials Pounds of materials used 360,000 120,000 pounds Machine depreciation and maintenance Machine-hours 209,000 11,000 hours Performing quality control Number of inspections 55,600 40 inspections Packing Number of units 110,000 440,000 units Total estimated cost $ 969,600 In addition, management estimated 7,600 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 63,000 25,000 7,000 Direct materials costs $ 38,000 $ 24,000 $ 16,000 Direct labor-hours 400 400 640 Number of orders 13 8 7 Number of production runs 3 4 6 Pounds of material 17,000 5,000 2,600 Machine-hours 600 160 80 Number of inspections 3 3 4 Units shipped 63,000 25,000 7,000 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 Janua