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Precision Manufacturing Inc. (PMI) makes two types of industrial component parts-the EX300 and the TX500 t annually produces 54,000 units of EX300 and 11,900 units
Precision Manufacturing Inc. (PMI) makes two types of industrial component parts-the EX300 and the TX500 t annually produces 54,000 units of EX300 and 11,900 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: EX300 TX500 Total $360,325 Direct materials $156,550 $516,875 Direct labor $114,000 39,500 $153,500 The company is considering implementing a activity-based costing system that distributes all of its manufacturing overhead to four activities as shown below Activity Activity Cost Pool Manufacturing EX300 Total (and Activity Measure) Overhead TX500 179,375 143,500 Machining (machine-hours) 84,000 59,500 Setups (setup hours) 96,900 45 240 285 Product-level number of products) 78,310 General factory (direct labor dollars) 44.515 $114,000 $39,500 $153,500 Total manufacturing overhead cost $399,100 Required 1-a. Compute the plantwide overhead rate that would be used in the company's conventional cost system. (Round your answer to 2 decimal places.) Predetermined overhead rate per DL$
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