College Supply Company (CSC) makes three types of drinking glasses: short, medium, and tall. It presently...

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College Supply Company (CSC) makes three types of drinking glasses: short, medium, and tall. It presently applies overhead using a predetermined rate based on direct labor-hours. A group of company employees recommended that CSC switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for Year 5 for each activity center. Activity Recommended Cost Driver Number of orders Estimated Cost Driver Units 100 runs 200 orders Setting up production Number of production runs Estimated Cost $ 32,000 Processing orders 52,000 Handling materials Pounds of materials 18,000 9,000 pounds Using machines Machine-hours 77,000 11,000 hours Providing quality management Number of inspections 56,000 40 inspections Packing and shipping Units shipped 40,000 20,000 units $275,000 In addition, management estimated 2,000 direct labor-hours for year 5. Assume that the following cost driver volumes occurred in February, year 5. Short Medium Tall Number of units produced 1,200 500 400 Direct materials costs $3,000 $2,500 $1,500 Direct labor-hours 100 110 120 Number of orders 9 7 4 Number of production runs 2 4 8 Pounds of material 400 900 200 Machine-hours 500 300 200 Number of inspections 3 2 3 Units shipped 1,200 500 300 Direct labor costs were $18 per hour. Required: a. Compute a predetermined overhead rate for year 5 for each cost driver recommended by the employees. Also compute a predetermined rate using direct labor-hours as the allocation base. b. Compute the production costs for each product for February using direct labor-hours as the allocation base and the predetermined rate computed in requirement a. c. Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requirement a. (Note: Do not assume that total overhead applied to products in February will be the same for activity-based costing as it was for the labor-hour-based allocation.) Required A Required B Required C Compute a predetermined overhead rate for year 5 for each cost driver recommended by the employees. Also compute a predetermined rate using direct labor-hours as the allocation base. (Round your answers to 2 decimal places.) Activity Allocation Rate Setting up production per run Processing orders per order Handling materials per lb. Using machines per hour Performing quality management per insp. Packing & shipping per unit Direct labor hour rate per hour Required A Required B Required C Compute the production costs for each product for February using direct labor-hours as the allocation base and the predetermined rate computed in requirement a. (Do not round intermediate calculations.) Short Medium Tall Direct materials $ 3,000 $ 2,500 $ 1,500 Direct labor Overhead Total costs Required A Required B Required C Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requirement a. (Note: Do not assume that total overhead applied to products in February will be the same for activity-based costing as it was for the labor-hour-based allocation.) (Do not round intermediate calculations.) Direct materials Direct labor Setting up production Processing orders Handling materials Using machines Performing quality management Shipping Total costs Short Medium Tall $ 3,000 $ 2,500 $ 1,500 Show less College Supply Company (CSC) makes three types of drinking glasses: short, medium, and tall. It presently applies overhead using a predetermined rate based on direct labor-hours. A group of company employees recommended that CSC switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for Year 5 for each activity center. Activity Recommended Cost Driver Number of orders Estimated Cost Driver Units 100 runs 200 orders Setting up production Number of production runs Estimated Cost $ 32,000 Processing orders 52,000 Handling materials Pounds of materials 18,000 9,000 pounds Using machines Machine-hours 77,000 11,000 hours Providing quality management Number of inspections 56,000 40 inspections Packing and shipping Units shipped 40,000 20,000 units $275,000 In addition, management estimated 2,000 direct labor-hours for year 5. Assume that the following cost driver volumes occurred in February, year 5. Short Medium Tall Number of units produced 1,200 500 400 Direct materials costs $3,000 $2,500 $1,500 Direct labor-hours 100 110 120 Number of orders 9 7 4 Number of production runs 2 4 8 Pounds of material 400 900 200 Machine-hours 500 300 200 Number of inspections 3 2 3 Units shipped 1,200 500 300 Direct labor costs were $18 per hour. Required: a. Compute a predetermined overhead rate for year 5 for each cost driver recommended by the employees. Also compute a predetermined rate using direct labor-hours as the allocation base. b. Compute the production costs for each product for February using direct labor-hours as the allocation base and the predetermined rate computed in requirement a. c. Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requirement a. (Note: Do not assume that total overhead applied to products in February will be the same for activity-based costing as it was for the labor-hour-based allocation.) Required A Required B Required C Compute a predetermined overhead rate for year 5 for each cost driver recommended by the employees. Also compute a predetermined rate using direct labor-hours as the allocation base. (Round your answers to 2 decimal places.) Activity Allocation Rate Setting up production per run Processing orders per order Handling materials per lb. Using machines per hour Performing quality management per insp. Packing & shipping per unit Direct labor hour rate per hour Required A Required B Required C Compute the production costs for each product for February using direct labor-hours as the allocation base and the predetermined rate computed in requirement a. (Do not round intermediate calculations.) Short Medium Tall Direct materials $ 3,000 $ 2,500 $ 1,500 Direct labor Overhead Total costs Required A Required B Required C Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requirement a. (Note: Do not assume that total overhead applied to products in February will be the same for activity-based costing as it was for the labor-hour-based allocation.) (Do not round intermediate calculations.) Direct materials Direct labor Setting up production Processing orders Handling materials Using machines Performing quality management Shipping Total costs Short Medium Tall $ 3,000 $ 2,500 $ 1,500 Show less