Computing Product Costs Using Activity-Based Costing: Petrov Company identified the following activities, estimated costs for each activity, and identified cost drivers for each activity for this coming year. (These are the first three steps of the activity-based costing model).

Activity Cost Driver Estimated Annual Estimated Annual Cost Driver Overhead Costs Activity Production setup Number of production $ 60,000 100 production runs runs Materials handling Yards of material 140,000 10,000 yards purchased purchased Quality control Number of inspections 80,000 800 inspections Total $280,000MX1 MX2 Direct materials cost per unit $20 $30 Direct labor costs per unit $15 $45 Overhead cost per unit Product cost per unit Units produced 1,000 units 700 unitsMX1 MX2 Number of production runs 3 6 Yards of materials purchased 550 230 Number of inspections 40 10Template for part (a) Activity Cost Driver Estimated Estimated Cost Pre-determined Overhead Costs Driver Activity Overhead Rate Production Number of $[ runs $[ ]per setups production units production run Materials Yards of materials $L L] yards $[ ] per yard handling purchased purchased Quality control Number of $L $[ ]per inspections inspections inspection Total $ LTemplate for part (b) MX1 MX2 Pre-determined Cost Driver Overhead Cost Driver Overhead Activity Allocated Activity Allocated Overhead Rate $[ ] per production $L $ run $[ ] per yard $L $L purchased $[ ] per inspection $L $ Total allocated