DE25-5 Suppose Chemtech's activity-based costing team identifies a fourth activity- machine setup. The foreman estimates that the total setup cost will be $270,000, and that production will require 3,000 setups. (This is less than the 4,000 total batches in Exhibit 25-7. Chemtech often eliminates a setup by running two batches of the same chemical in a row.) Aldehyde will require 35 setups, and PH will require 1 setup. 1. Compute the cost allocation rate for machine setups. 2. Compute the total machine setup costs allocated to aldehyde and to PH. 3. Did Chemtech's original allocation base (200% of direct labor cost) allocate setup costs appropriately? Give your reason.