Problem 2: Sandra Saldana, senior vice president for sales for Showman Shoes, Inc., noticed that the company had substantially increased its market share for the highquality boomer boots (BB) and lost market share for the lowerquality lazy loafers (LL). The company currently uses a plantwide overhead rate based on direct labor hours. The rate is computed at the beginning of the year using the following budgeted data: Total manufacturing overhead $1,200,000 Total machine hours 49,400 Total direct labor hours 49,000 Total setup hours 520 Your assistant has provided you with the following actual information about the production of batches of BB and LL: For each batch of BB [1,000 pairs) For each batch of LL (3,000 pairs): Cutting Assembly Total Cutting Assembly Total Direct Labor Hours 80 120 200 150 180 330 Machine Hours 160 120 280 150 120 220 Setup Hours 3 1 4 1 1 2 Direct Costs $7,500 $6,000 $13,500 $9,000 $7,200 $16,200 Activities Cost Activity Categogy Cost Driver Maintenance $160,000 Product sustaining Machine hours Setups 400,000 Batch related Setup hours Cutting supervision 280,000 Batch related Setup hours Cutting depreciation 160,000 Facility sustaining Machine hours Assembly supervision 160,000 Unit related Direct lab. hrs. Assembly depreciation 40,000 Facility sustaining Machine hours $1,200,000