Problem 9-58 (Algo) Activity-Based Costing and Predetermined Overhead Rates (LO 9-3, 5, 6) College Supply Company (CSC) makes three types of drinking glasses: short, medium, and tall. It presently applies overhead using a predetermined rate based on direct labor hours. A group of company employees recommended that CSC switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for Year 5 for each activity center Activity Setting up production Processing orders Handling materials Using machines Providing quality management Packing and shipping Recommended Cost Driver Number of production runs Number of orders Pounds of materials Machine-hours Number of inspections Units shipped Estimated Cost $ 38,000 57,200 14,000 56,000 48.000 36,000 $247,200 Estimated cost Driver Units 120 runs 220 orders 7,000 pounds 3,000 hours 40 inspections 18,000 units In addition, management estimated 2,000 direct labor-hours for year 5. Assume that the following cost driver volumes occurred in February year 5. Tall 400 Short 1,000 $4,000 100 Number of units produced Direct materials costs Direct labor-hours dan Medium 500 $3,000 130 7 $1,500 120 Assume that the following cost driver volumes occurred in February, year 5. Medium 500 Number of units produced Direct materials costs Direct labor-hours Number of orders Number of production runs Pounds of material Machine-hours Number of inspections Units shipped Short 1,000 $4,000 100 7 2 400 400 2 1,000 $3,000 130 7 4 700 200 2 500 Tall 400 $1,500 120 5 8 300 300 2 300 Direct labor costs were $20 per hour Required: a. Compute a predetermined overhead rate for year 5 for each cost driver recommended by the employees. Also compute a predetermined rate using direct labor hours as the allocation base. b. Compute the production costs for each product for February using direct labor-hours as the allocation base and the predetermined rate computed in requirement a c. Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requiremento (Note: Do not assume that total overhead applied to products in February will be the same for activity based costing as it was for the labor-hour based allocation.) Comalat Direct labor costs were $20 per hour. Required: a. Compute a predetermined overhead rate for year 5 for each cost driver recommended by the employees. Also compute a predetermined rate using direct labor hours as the allocation base. b. Compute the production costs for each product for February using direct labor-hours as the allocation base and the predetermined rate computed in requiremento c. Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requiremento (Note: Do not assume that total overhead applied to products in February will be the same for activity based costing as it was for the labor hour-based allocation.) Complete this question by entering your answers in the tabs below. Required A Required B Required Compute a predetermined overhead rate for years for each cost driver recommended by the employees. Also computea predetermined rate using direct labor-hours as the allocation base. (Round your answers to 2 decimal places) Activity Setting up production Processing orders Handling materials Using machines Performing quality management Packing & shipping Direct labor hour rato Allocation Rate per run per order por lo per hour por insp per unit per hour predetermined rate using direct labor hours as the allocation base b. Compute the production costs for each product for February using direct labor hours as the allocation base and the predetermined rate computed in requirement a. c. Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requirement (Note: Do not assume that total overhead applied to products in February will be the same for activity based costing as it was for the labor-hour-based allocation) Complete this question by entering your answers in the tabs below. Required A Required B Required Compute the production costs for each product for February using direct labor hours as the allocation base and the predetermined rate computed in requirement a. (Do not round intermediate calculations.) Short Medium 4,000 $ 3,000 $ Tall 1,500 $ Direct materials Direct labor Overhead Total costs same for activity based costing as it was for the labor hour-based allocation) Complete this question by entering your answers in the tabs below. Required A Required B Required Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requirement a. (Note: Do not assume that total overhead applied to products in February will be the same for activity-based costing as was for the labor-hour-based allocation.) (Do not round intermediate calculations.) Show less Short Medium 4,000 $ 3,000 $ Tall 1,500 $ Direct materials Direct labor Setting up production Processing orders Handling materials Using machines Performing quality management Shipping Total costs