Exercise $5-13$ Overhead Application $[$LO$3,$ LO$5]$

Sportway Inc. produces high$-$quality tennis racquets and golf clubs using a patented forming process and high$-$quality hand$-$finishing. Products move through two production departments: Forming and Finishing. The company uses departmental overhead rates to allocate overhead costs. Overhead is allocated based on machine$-$hours in Forming and direct labour cost in Finishing. Information related to costs for last year is provided below:

Tennis Racquets Golf Clubs

Annual production and sales $($units$)5,0008,000$

Direct materials cost per unit $ $4\mathrm{.}50$ $ $3\mathrm{.}50$

Direct labour cost per unit:

Forming Department $ $3\mathrm{.}00$ $ $2\mathrm{.}50$

Finishing Department $ $6\mathrm{.}00$ $ $4\mathrm{.}00$

Machine$-$hours per unit:

Forming Department $0\mathrm{.}250\mathrm{.}25$

Finishing Department $0\mathrm{.}50$

In addition, the firm budgets manufacturing overhead at $$35,750$ in the Forming Department and $$46,500$ in the Finishing Department.

Required:

$1.$ Determine the overhead application rate for each department. $($Round your answers to $2$ decimal places.$)$

$2.$ Determine the total cost per unit of tennis racquets and golf clubs. $($Round your answers to $2$ decimal places.$)$