Question 3 (18 Marks) Carolina Industries manufactures two products, Product C and Product D. The company estimated it would incur $160,790 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labour hours. Data concerning the current period's operations appear below: Estimated Volume Direct Labour Hours per Unit Direct Materials Cost per Unit Direct Labour Cost per Unit Product C 3,400 units 1.40 hour $7.40 $14.00 Product D 4,800 units 1.90 hours $12.70 $19.00 Required: a) Compute the predetermined overhead rate under the current method, and determine the unit product cost of each product for the current year. (8 Marks) b) The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labour hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below: Activity Cost Pool Machine setups Purchase orders General factory Total Estimated Overhead Costs $12,190 79,200 69,400 $160,790 Expected Activity Product C Product D Total 80 150 230 730 920 1.650 4,760 9,120 13,880 Determine the overhead rates for each activity centre and the unit product cost of each product Ifor the current period using the activity-based costing approach. (10 Marks)