Problem 17-3A (Part Level Submission) Shaker Stairs Co.designs and builds factory made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of varying lengths and widths. All are of white oak wood. Budgeted manufacturing overhead costs for the year 2017 are as follows. Overhead Cost Pools Purchasing Handling materials Production (cutting, milling, finishing) Setting up machines Inspecting Inventory control (raw materials and finished goods) Amount S73,B00 B2,400 216,000 105,000 109,000 129,260 270.000 $984,560 Utilities Total budgeted overhead oosts For the last 4 years, Shaker Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2017, 100,000 machine hours are budgeted. Jeremy Nolan, owner-manager of Shaker Stairs Co., recently directed his accountant, Bill Seagren, to implement the activity-based costing system that he has repeatedly proposed. At Jeremy Nolan's request, Bill and the production foreman Identify the following cost drivers and their usage for the previously budgeted averhead cost pools. Cost Drivers Expected Use of Cost Drivers Activity Cost Pools Purchasing Handling materials Production (cutting, miling, finishing) Setting up machines Inspecting Inventory control (raw materials and finished gonds) Utilities Nurnber of orders Number of moves Direct labor hours Nurnber of setups Nurnber of inspections Number of components Square feet occupied 8,000 100,000 1,250 6,000 168,000 90,000 Steve Hannon, sales manager, has received an order for 250 stairways from Community Builders, Inc., a large housing development contractor. At Steve's request, Bill prepares cost estimates for produdng components for 250 stairways so Steve can submit a contract price per stairway to Community Builders. He accumulates the following data for the production of 250 stairways $104,100 $113,000 15,50D 5,500 60 Direct materials Direct labor Machine hours Direct labor hours Nurnber of purchase orders Number of material moves Number of machine setups Number of inspections Number of components Number of square feet accupied 900 100 450 16,000 8,000 (a) Compute the predetermined overhead rate using traditional costing with machine hours as the basis. (Round answer to 2 decimal places, e.g. 12.25.) Predetermined overhead ratet per machine hour Click if you would like to Show Work for this question: Open Show Work