sparkle company makes three types of sunglasses stars Greek and fashion sparkle presently applies overhead using a preditarmain overhead rate based on direct labor hours a group of comapny employees recooanded that sparkle switch to activity based costing and identified for yers 2 for each activity center

activity cost drive base est cost est cost drive units

production setup number of production run $80000 200 runs

order processing nu of order 160000 200 orders

material handling nu of pound material 40000 8000 pounds

equip depriciation nu of machine hours 140000 100000 hours

quality management nu of inspection 100000 40 inspection

packing and shipping nu of units shipped 80000 20000 units

$ 600000

in addition manaegment estimated 2000 direct labor hours for year 2 and the activities occured in feb of year 2

nu of units produced 1000 500 400

direct material costs $ 4000 2500 2000

direct labor hours 100 120 110

nu of orderd 8 8 4

number of production run 4 8 16

nu of pound material 400 200 200

nu of machine hours 500 300 300

nu of inspection 2 2 2

nu of units shipped 1000 500 300

1compute the predetairmian overhead for year 2 for each cost drive recommanded by employees also compute a predetairmed overhead rate using direct labor hour as the allocation base

2compute the production costs for each product for feb using direct labor hours and preditairmind as a llocation base and the predetairmained rate in requirment a2

3compute the production cost for feb using cost drivers recommended by employees and predetarmaind rate computed in a1 do not assume the that total overhaid applied to products in feb will be the same for ABC as it was for the labor hours based allocation

4how you account for the discrepancy between the product costing using direct labor hour as allocation base and the product cost using ABC