traluituiull 10 ABC: Comparison to Surfs Up manufactures surfboards. The company produces tn models the small board and the big board. Data regarding the costing LO2,3,4 two boards aze as follows Total direct production 10000 boards labour hours 15000 35000 Product Direct labour Annual hours per unit 1.5 1.0 Big 35000 boards Small The big board requires $75 in direct materials per unit whereas the small board requires $40. The company pays an average direct labour rate of $13 per hour The company has historically used direct labour hours as the activity base for applying ovethead to the boards. Manufacturing overhead is estimated to be $1664000 per year The big board is more complex to manufacture than the small board because it requires more machine time Blake Moore, the company's controller, is considering the use of activity-based costing to apply overhead because the surfboards require such different amounts of machining Biake has identified the following four separate activity centres. Volume of annual activity Traceable Big Smal costs board board Activity centre Machine setup Number of setups $100000 100 Special design Design hours $364000 900 Production Direct labour hours $900000 15000 Machining Machine hours $300000 9000 Cost driver 900 00 Required a Calculate the overhead rate based on traditional b Determine the total cost to produce one unit of each C Calculate the overhead tate for each activity cente d Determine the total cost to produce one unit o e Explain why overhead coet shifted from the hign allocation with direct labour hours as the base Use the overhead rate calculated in queonsed activity-based costing techniques Use the overhead rates calculated in questionu product to the low-volume product under act A) of each costing activity-based