The following information relates to Burgundy for July 2020: Actual direct labour costs $50,000 Actual direct labour rate per hour $10 Factory overhead rate per direct labour hour $15 Factory overhead incurred $80,000 As part of the cost planning and cost control of operations and activities, management is concerned regarding the applied overhead rate used. Required a) Identify whether there is an underapplied or overapplied overhead. Assuming underapplied or overapplied overhead is transferred to cost of goods sold at the end of the period, which would be the adjustment to the cost of goods sold account? (4 marks) Aquamarine plans to manufacture two lines of chairs in the coming year lounge and patio. The company is considering introducing an activity-based costing system. Given below are each activity, its cost and its related activity driver. Activity Cost Activity Driver Material setups $200,000 Number of setups Material handling $150,000 Number of parts Cutting $600,000 Number of parts Assembly $300,000 Direct labour hours Finishing $600,000 Number of units The level of activity for the year is: Lounge Patio Units to be produced 10,000 5,000 Number of setups 60 60 Number of parts per unit 10 5 Direct labour hours per unit 4 2 Required a) Under an activity-based costing system, what is the activity cost per unit of activity driver for assembly? (5 marks) b) Under an activity-based costing system, what is the total cost of lounge chairs for the year?