Maple Woods Inc. manufactures lounge chairs available in both a luxury and a standard model. The company has made the standard model for years; the luxury model was introduced several years ago to capture a new segment of the market. Since the introduction of the luxury model, the company's profits have steadily declined, and management has become concerned about the accuracy of its costing system. Sales of the luxury model have been increasing rapidly. Overhead is applied to products on the basis of direct labour hours. At the beginning of the current year, management estimated that $5,688,152 in overhead costs would be incurred and the company would produce and sell 5,600 units of the luxury model and 42,160 units of the standard model. The luxury model requires 3.0 hours of direct labour time per unit, and the standard model requires 2.0 hours. Materials and labour costs follow: Direct materials cost per unit Direct labour cost per hour Luxury $172 15 Standard $132 18 Required: 1. Compute the predetermined overhead rate using direct labour hours as the basis for allocating overhead costs to products. Compute the unit product cost for one unit of each model. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Predetermined overhead rate Unit product cost of Luxury Unit product cost of Standard per DLH 2. An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea. and it came back with the recommendation that four activity cost pools be used. These cost pools and their associated activities follow: Activity Cost Pool and Activity Measure Purchase orders (number of orders) Rework requests (number of requests) Product testing (number of tests) Machine related (machine hours) Estimated Overhead Cost Luxury Activity Standard Total $ 523,632 1,000 1,400 2,400 312,600 1,075,920 800 1,200 2,000 5,000 7,000 12,000 3,776,000 15,000 25,000 40,000 $5,688,152 Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools. Activity Cost Pool Purchase orders Rework requests Product testing Machine related Activity Rate per order per request per test per MH