Problem 2 Bayline, Inc. manufactures two types of surf boards, Beginner and Longboard. Manufacturing overhead has een applied on the basis of direct labor hours. Bayline, gathers some activity information and is interested in implementing an activity-based costing system. The company wants all overhead costs to be allocated to products. The overhead costs pools and activity drivers ae as follows: Activity Pool Machine setup Cutting/Assembly Total overhead costs Overhead costs $36,000 $62,000 $98,000 Total Drive Usage 1,00 setups 31,000 machine hours Other product information is as follows: Units produced Direct material Direct labor Direct labor hours Machine setups Machine hours Beginner 40,000 $10 per unit $8 per unit 6,000 750 20,000 Longboard 42,000 $25 per unit $10 per unit 8,000 250 11,000 Required: a. Using the traditional method, determine the overhead rate per direct labor hour. b. Using the activity-based costing approach, determine the two activity rates