Single Plantwide Rate WoolCorp is currently using the single plantwide factory overhead rate method, which uses a predetermined overhead rate based on an estimated allocation base such as direct labor hours or machine hours. The rate is computed as follows: Single Plantwide Factory Overhead Rate = (Total Budgeted Factory Overhead) - (Total Budgeted Plantwide Allocation Base) WoolCorp has been using combing machine hours as its allocation base. The company would like to consider activity-based costing. In order to understand their current system better, you evaluate WoolCorp's current method of costing for raw wool and wool yarn. The production staff has compiled the following information for you on the production of 550 pounds of either raw wool or wool yarn: Factory Overhead Type Budgeted Factory Overhead Sorting $25,600 Cleaning 38,400 Combing 1,300 Raw Wool Wool Yarn Hours of combing machine use required 70 30 In the following table, use combing machine hours as the allocation base for assigning overhead costs to each product. When required, round your answers to the nearest dollar. Single Plantwide Factory Overhead Rate: $ X per combing hour Raw Wool Wool Yarn Allocated factory overhead cost Raw Wool Wool Yarn Allocated factory overhead cost Feedback Check My Work Review the single plantwide factory overhead rate method, and allocate the costs using a single plantwide factory overhead rate and the combing hours used by each product. Activity-Based Costing In order to compare WoolCorp's current method with activity-based costing, you interview the production staff and compile the following information, which relates to the costs for raw wool and wool yarn. Type of Cost Activity Base Total Cost Sorting Hours of sorting $25,600 Cleaning Units of cleaning machine power 38,400 1,300 Combing Hours of combing machine use Raw Wool Wool Yarn Hours of sorting required 1,000 4,000 1,920 4,480 Units of cleaning machine power required Hours of combing machine use required 70 30 In the following table, compute and enter the activity rate for each of the three activities. If required, round your answers to the nearest cent. Check My Work Previous UTV W L TCULUT Activity Activity Rate Sorting $ per sorting hour Cleaning per unit of cleaning machine power Combing per hour of combing machine use In the following table, allocate the costs of sorting, cleaning, and combing based on the rates of activity consumed by each product's process. When required, round your answers to the nearest dollar. Raw Wool Wool Yarn Sorting cost Cleaning cost Combing cost Total cost $ Feedback Check My Work Review the activity-based costing method and allocate the costs using the rate computed for each activity. Final Question After reviewing your work on the Single Plantwide Rate and Activity-Based Costing panels, which of the costing method would you recommend to WoolCorp, and why? Activity-based costing method, because it recognizes differences in how each product uses factory overheai Feedback