Metal Smiths Co. manufacturers and sells machinery parts. The Company has four main, but differently made, products screws, bolts, tool chests, and aluminum sheeting. The Company expects to make the following number of units for each product and expects the applicable overhead costs for each product as follows:

A. Calculate the Overhead Application Rate if MetalSmith Co. were to use a single application rate.

B. Calculate the Overhead Application Rates if Metal Smiths Co. were to use an activity-based costing method for each product. (Be sure to identify which rate is for each product).

C. Which do you think is a better costing method for Metal Smiths Co. Single Application Rate or Activity-Based Costing? Why? Which products are over costed or under costed using the single application rate (relative to Activity-Based Costing)?