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Precision Manufacturing Inc. (PMI) makes two types of industrial component partsthe EX300 and the TX500. It annually produces 54,000 units of EX300 and 11,900 units

Precision Manufacturing Inc. (PMI) makes two types of industrial component partsthe EX300 and the TX500. It annually produces 54,000 units of EX300 and 11,900 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 $ 360,325 $ 156,550 $ 516,875
Direct labor $ 114,000 $ 39,500 $ 153,500

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) $ 179,375 84,000 59,500 143,500
Setups (setup hours) 96,900 45 240 285
Product-level (number of products) 78,310 1 1 2
General factory (direct labor dollars) 44,515 $ 114,000 $ 39,500 $ 153,500
Total manufacturing overhead cost $ 399,100

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.

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