parts aA-D please!!!

12 Should yolla ng results to management? 9.57. Activity-Based Costing and Predetermined Overhead Allocation Rates 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 consul- the following cost estimates for year 2 for the recommended cost drivers. tant recently suggested that the company switch to an activity-based costing system and prepared (LO 9-3, 5, 6) Recommended Cost Driver excel Activity Processing orders Setting up production Handling materials. Number of orders Number of production runs Pounds of materials used Estimated Estimated Cost Cost Driver Activity $ 54,000 200 orders 216,000 100 runs 360,000 120,000 pounds Machine depreciation and maintenance........ Performing quality control Packing Total estimated cost. Machine-hours Number of inspections Number of units 288,000 12,000 hours 72,000 45 inspections 144,000 480,000 units $1,134.000 In addition, management estimated 7,500 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 Direct materials costs Direct labor-hours Number of orders. Number of production runs Pounds of material. Machine-hours Number of inspections Units shipped 60,000 $39,000 450 12 3 15,000 580 3 60,000 24,000 $24,000 450 9 3 6,000 140 3 24,000 9,000 $15,000 600 6 6 3,000 80 3 9,000 Actual labor costs were $15 per hour. Required a 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. Also compute a predeter- mined 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). C Compute the production costs for each product for January using the cost drivers recom- not assume that total overhead applied to products in January will be the same for activity- mended by the consultant and the predetermined rates computed in requirement (a). (Note: Do based costing as it was for the labor-hour-based allocation.) d Management has seen your numbers and wants an explanation for the discrepancy between activity-based costing. Write a brief response to management