PR 11-3B Activity-based department rate product costing and product cost OBJ. 3,4 distortions Big Sound Inc. manufactures two products: receivers and loudspeakers. The factory over- head incurred is as follows: Indirect labor $400,400 Subassembly Department 198,800 Final Assembly Department 114,800 Total $714,000 (Continued) methol Assume that indirect lalor is associated with the production departments The with the production departments is direct labels The activity base usage quantities and units produced for the two products follow The can be assigned to two different activities as follows Activity Base Activity Budgeted Activity Cout Number of setups $110.000 Number of inspections 261.800 $4,400 Number of Number of Inspections Direct Labor Hours Subassembly Direct Labor Hours Final Assembly Units Produced 80 Receivers Loudspeakers Total 450 1.750 2,200 525 1,400 525 875 1.400 7,000 7,000 14,000 Instructions 1. Determine the factory overhead rates under the multiple production department rate so that the total factory overhead is $420,000 and $294,000 for the Subassembly and Final Assembly departments, respectively. 2. Determine the total and per unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). 3. Determine the activity rates, assuming that the indirect labor is associated with activi: ties rather than with the production departments. Determine the total and per-unit cost assigned to each product under activity-based costing -Explain the difference in the per unit overhead allocated to each product un der the multiple production department factory overhead rate and activity-based costing methods