Northwest Company produces two types of glass shelving: rounded edge and squared edge. The company reports the following.

Direct materials

Direct labor

Overhead $($using plantwide rate$)$

Total product cost

Rounded Edge

$$30,000$

$20,000$

$12,000$

$$62,000$

Squared Edge

$$60,000$

$72,000$

$43\mathrm{.}200$

S$175\mathrm{.}200$

Total

$$90,000$

$92,000$

$55\mathrm{.}200$

$$237\mathrm{.}200$

Units produced

Product cost per unit

$10\mathrm{.}000$

$$6\mathrm{.}20$

$12\mathrm{.}000$

$$14\mathrm{.}60$

Northwest's controller wants to apply activity$-$based costing to allocate the $$55,200$ of overhead costs to the two products to see whether product cost per unit would change markedly from that above. The following information is collected.

Activity

Purchasing

Depreciation of machinery

Setup

Budgeted Cost Activity Driver

$$2,500$ Purchase orders

$33,600$ Machine hours

$19\mathrm{.}100$ Setups

$10,100$

$$55\mathrm{.}200$

Budgeted Activity of Cost Driver

Rounded Edge Squared Edge

$100$ POs

$400$ POs

$400$ MHs

$2\mathrm{.}400$ MHs

$80$ setups

$302$ setups

Total

$500$ POs

$2\mathrm{.}800$ MHs

$382$ setups

$1.$ Compute an activity rate for each activity using activity$-$based costing.

$2.$ Compute overhead cost per unit for each of the two products using activity$-$based costing.

$3.$ Determine product cost per unit for each of the two products using activity$-$based costing.Northwest Company produces two types of glass shelving: rounded edge and squared edge. The company reports the

following.

Northwest's controller wants to apply activity$-$based costing to allocate the $$55,200$ of overhead costs to the two products to

see whether product cost per unit would change markedly from that above. The following information is collected.

Compute an activity rate for each activity using activity$-$based

costing.

Compute overhead cost per unit for each of the two products

using activity$-$based costing.

Determine product cost per unit for each of the two products

using activity$-$based costing.