Question 9: Anjan Paints manufactures two high-quality base paints: an oil-based paint and a latex paint. Both are house paints and are manufactured in neutral white color only. After analyzing the company's entire operations, Anjan's accountants and production managers have identified activity cost pools and accumulated annual budgeted overhead costs by pool as follows. Activity Cost Pools Estimated Overhead Purchasing Processing Packaging Testing Storage and Inventory Control Washing and Cleaning equipment Total annual budgeted overhead $ 260,000 $1,500,000 $ 600,000 $250,000 $ 200,000 $590,000 $3,400,000 Following further analysis, activity cost drivers were identified and their expected use by product and activity were scheduled as follows. Expected use of drivers per product Activity Cost Pools Cost Drivers Purchasing Purchase orders Processing Gallons processed Expected Cost Drivers per Activity 1,500 orders 1,000,000 gallons Oil-based Latex 800 700 400,000 600,000 Packaging Containers filled 400,000 containers 180,000 220,000 Testing Number of tests 4,000 tests 2,100 1,900 Storage Average gallons on hand 18,000 gallons 10,400 7,600 Washing Number of batches 800 batches 350 450 a. Calculate the activity rates [4 marks] b. Allocate the overhead costs [4 marks] c. Compute the overhead cost per unit [2 Marks]