Pinto Industries produce a variety of goods. In the past the company used a single predetermined overhead rate using machine hours to allocate manufacturing overhead. Managers estimate the company will use a total of 100,000 direct labor hours, 50.000 machine hours and incur $1,200,000 of manufacturing overhead in the upcoming year. The business has become more competitive so management has suggested that they need a better understanding of their costs. In order to better allocate manufacturing overhead costs, the company is going to start using an activity-based costing system. Management has estimated the following costs for the period: Direct Materials Direct Labor Umbrellas $15.40 $10.00 Costs per unit Swords Chalkboards $10.30 $18.60 $12.00 $13,50 Leather Hats $14.10 $11.00 Estimated Manufacturing Overhead: Activity Pool Activity Measure Purchasing Molding Material Handling A Est. Activity MOH $220,000 $750,000 $250.000 P. Machine Hours Direct Labor Hours Data for each product: Activity Cost Pool (Measure) Purchusing (P.O.) Molding (Machine Hours) Materials Handling (Direct Labor Hours) Number of units produced Umbrellas 4,500 12.000 6.200 61.800 Estimated Activity Level for each product Swords Chalkboards 5.000 8.000 16.000 15.200 9.000 10.500 65.000 70.000 Leather Hats 3.500 9.000 4.000 55.000 Materials Handling Direct Labor Hours /SV.000 $250.000 Data for each product: Activity Cost Pool (Measure) Purchasing (P.0.3) Molding (Machine Hours) Materials Handling (Direct Labor Hours) Number of units produced Umbrellas 4.500 12.000 6,200 61.800 Estimated Activity Level for each product Swords Chalkboards 5.000 8,000 16.000 15.200 9.000 10.500 65.000 70.000 Leather Hats 3.500 9,000 4,000 55,000 Required: 1) The company has decided to switch to an ABC System for allocating overhead. Calculate the Activity Rates (round to the penny). 2) Using activity-based costing, how much overhead would be allocated (applied) to producing 55.000 Umbrellas (round to the dollar)? 3) What is the total product cost for ONE of the Umbrellas if the company uses an activity-based costing system fround to the penny)? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)