Question 4 (13 marks) A company manufactures a product with three models, each with different direct material costs and labour hour required and monthly production volume as follows: Units of production Model A 1,700 Model B 1,200 Model C 1,100 Labour hour required 0.3 0.6 0.7 Direct material costs 30 40 50 Labor rate is $10 per hour. The total manufacturing overhead is estimated to be $103,000 per month. Required: a) The manufacturing overhead is allocated to the three models based on labor hour. Compute the pre-determined overhead rate and the unit product cost of Model A. (4 marks) b) The company is considering to use the activity-based costing and gathers the following data related to the cost and activities: Expected Activity Activity Cost Pool Overhead Costs Model A Model B Model C Activity 1 $30,000 1,000 600 400 Activity 2 $17,000 1,700 200 100 General Factory $56,000 510 660 230 Total $103.000 i. Compute the activity rate for each activity. (3 marks) ii. Compute the unit product costs of Model A and Model B. (6 marks) *** End of Paper ***