Northwest's controller wants to apply activity-based costing to allocate the $122,400 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.

ActivityBudgeted Cost Activity Driver Activity Usage

Rounded Edge Squared Edge Total

Purchasing $ 6,300 Purchase orders 154 orders 476 orders 630 orders

Depreciation of machinery 63,800 Machine hours 500 hours 1,500 hours 2,000 hours

Setup 52,300 Setups 40 setups 210 setups 250 setups

Total overhead$ 122,400

Required:

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.