Xue Manufacturing Company manufactures blue rugs using wool and dye as direct materials. One rug is budgeted to use 38 skeins of wool at a cost of $4 per skein and 0.7 gallons of dye at a cost of $7 per gallon. All other materials are indirect. At the beginning of the year, Xue has an inventory of 450,000 skeins of wool at a cost of $855,000 and 3,700 gallons of dye at a cost of $21,830. Target ending inventory of wool and dye is zero. Xue uses the FIFO inventory cost flow method. (Click the icon to view the additional information.) It budgets 0.3 machine-hours to dye each skein in the dyeing process. There is no direct manufacturing labor cost for dyeing. Xue budgets 52 direct manufacturing labor-hours to weave a rug at a budgeted rate of $14 per hour. (Click the icon to view the budgeted overhead costs.) Requirement 2. Calculate the budgeted overhead allocation rates for weaving and dyeing. Data table More info Xue blue rugs are very popular and demand is high, but because of capacity constraints the firm will produce only 225,000 blue rugs per year. The budgeted selling price is $2,100 each. There are no rugs in beginning inventory. Target ending inventory of rugs is also zero. Xue makes rugs by hand, but uses a machine to dye the wool. Thus, overhead costs are accumulated in two cost pools-one for dyeing and the other for weaving. Dyeing overhead is allocated to products based on machine-hours (MH). Weaving overhead is allocated to products based on direct manufacturing labor-hours (DMLH)