b. Using the activity-based costing method: 1. Compute the activity-based overhead rates for the cost pools 2. Compute the overhead cost assigned to each product b. Using the activity-based costing method: 1. Compute the activity-based overhead rates for the cost pools 2. Compute the overhead cost assigned to each product Problem Six: HI Company manufactures two products: "Product A" and "Product B" The expected annual manufacturing overhead is $1,200,000. The company's managers identified three-activity cost pools and related cost drivers and accumulated overhead by cost pools as follows: Activity Estimated Overhead Cost driver Expected use of cost drivers by product Expected use of cost drivers cost pool Product A Product B Setting up machines Number of Setups $500,000 200,000 setups 120,000 80,000 Direct Labor Assembling 600,000 300,000 DL hours 180,000 120,000 Hours Number of Inspection 100,000 40,000 inspections 25,000 15,000 Inspections Instructions: a. Using the traditional method; compute the overhead cost assigned to each product, assuming that direct labor hours is used to allocate overhead costs b. Using the activity-based costing method: 1. Compute the activity-based overhead rates for the cost pools 2. Compute the overhead cost assigned to each product b. Using the activity-based costing method: 1. Compute the activity-based overhead rates for the cost pools 2. Compute the overhead cost assigned to each product Problem Six: HI Company manufactures two products: "Product A" and "Product B" The expected annual manufacturing overhead is $1,200,000. The company's managers identified three-activity cost pools and related cost drivers and accumulated overhead by cost pools as follows: Activity Estimated Overhead Cost driver Expected use of cost drivers by product Expected use of cost drivers cost pool Product A Product B Setting up machines Number of Setups $500,000 200,000 setups 120,000 80,000 Direct Labor Assembling 600,000 300,000 DL hours 180,000 120,000 Hours Number of Inspection 100,000 40,000 inspections 25,000 15,000 Inspections Instructions: a. Using the traditional method; compute the overhead cost assigned to each product, assuming that direct labor hours is used to allocate overhead costs