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Precision Manufacturing Inc. (PMI) makes two types of industrial component partsthe EX300 and the TX500. It annually produces 53,000 units of EX300 and 11,800 units

Precision Manufacturing Inc. (PMI) makes two types of industrial component partsthe EX300 and the TX500. It annually produces 53,000 units of EX300 and 11,800 units of TX500. The companys conventional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the companys two product lines is shown below:

EX300 TX500 Total
Direct materials $ 359,325 $ 155,550 $ 514,875
Direct labor $ 113,000 $ 39,000 $ 152,000

The company is considering implementing an activity-based costing system that distributes all of its manufacturing overhead to four activities as shown below:

Activity Cost Pool (and Activity Measure) Manufacturing Overhead Activity

EX300 TX500 Total
Machining (machine-hours) $ 170,400 83,000 59,000 142,000
Setups (setup hours) 89,100 40 230 270
Product-level (number of products) 77,940 1 1 2
General factory (direct labor dollars) 42,560 $ 113,000 $ 39,000 $ 152,000

Total manufacturing overhead cost $ 380,000

Required: 1-a. Compute the plantwide overhead rate that would be used in the companys conventional cost system. (Round your answer to 2 decimal places.)

Required: 1-a. Compute the plantwide overhead rate that would be used in the companys conventional cost system. (Round your answer to 2 decimal places.) Predetermined overhead rate per DL$

1-b. Using the plantwide rate, compute the unit product cost for each product. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Unit product cost EX300 TX500

2-a. Compute the activity rate for each activity cost pool. (Round your Machining and General factory activity rates to 2 decimal places.)

Activity Cost Pools Activity Rate

Machining per MH

Setups per setup hr.

Product-level per product

General factory per DL$

2-b. Using the activity rates, compute the unit product cost for each product. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Unit product cost

EX300

TX500

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