Rowland Textile Inc. manufactures two products: sweatshirts and T-shirts. The manufacturing process involves two activities: cutting and sewing. Expected overhead costs and cost drivers are as follows:

Required:
1. Calculate the activity-based overhead rates. Use machine hours for the cutting activity and direct labour hours for the sewing activity.
2. Calculate a plantwide overhead rate using direct labour hours as the cost driver.
3. Assume the activities for sweatshirts are as follows:

Calculate the overhead costs allocated to sweatshirts based on the activity-based overhead rates calculated in Requirement 1.
4. Using the assumptions given in Requirement 3, calculate the overhead costs allocated to sweatshirts using the plantwide overhead rate in Requirement 2.

Cutting $320,000 Sewing Overhead costs Machine hours Direct labour hours $700,000 50,000 800,000 Cutting Sewing Machine hours Direct labour hours 4 4 2.