Precision Manufacturing Inc. (PMI) makes two types of industrial component partsthe EX300 and the TX500. It annually produces 50,000 units of EX300 and 11,500 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 $ 356,325 $ 152,550 $ 508,875 Direct labor $ 110,000 $ 37,500 $ 147,500 The company is considering implementing an activity-based costing system that distributes all of its manufacturing overhead to four activities as shown below: Activity Activity Cost Pool (and Activity Measure) Manufacturing Overhead EX300 TX500 Total Machining (machine-hours) $ 144,375 80,000 57,500 137,500 Setups (setup hours) 67,500 25 200 225 Product-level (number of products) 75,750 1 1 2 General factory (direct labor dollars) 36,875 $ 110,000 $ 37,500 $ 147,500 Total manufacturing overhead cost $ 324,500 Required: 1-a. Compute the plantwide overhead rate that would be used in the companys conventional cost system. 1-b. Using the plantwide rate, compute the unit product cost for each product. 2-a. Compute the activity rate for each activity cost pool. 2-b. Using the activity rates, compute the unit product cost for each product.

Precision Manufacturing Inc. (PMI) makes two types of industrial component partsthe EX300 and the TX500. It annually produces 50,000 units of EX300 and 11,500 units of TX500. The company's 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 company's two product lines is shown below: Direct materials Direct labor EX300 $356, 325 $110,000 TX500 $152,550 $ 37,500 Total $ 508,875 $147,500 The company is considering implementing an activity-based costing system that distributes all of its manufacturing overhead to four activities as shown below: Activity Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-level (number of products) General factory (direct labor dollars) Total manufacturing overhead cost Manufacturing Overhead $144,375 67,500 75,750 36,875 $324,500 EX300 80,000 25 1 $ 110,000 TX500 57,500 200 1 $37,500 Total 137,500 225 2 $147,500 Required: 1-a. Compute the plantwide overhead rate that would be used in the company's conventional cost system. 1-b. Using the plantwide rate, compute the unit product cost for each product. 2-a. Compute the activity rate for each activity cost pool. 2-b. Using the activity rates, compute the unit product cost for each product