Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum....

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Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct labor-hours. The plant controller has recommended that the company switch to an activity-based costing system. The controller's staff prepared the following cost estimates for next year (year 2) for the recommended cost drivers. Activity Purchasing material Receiving material Setting up equipment Machine depreciation and maintenance Ensuring regulatory compliance Shipping Total estimated cost Recommended Cost Driver Number of purchase orders Direct materials cost Number of production runs Machine-hours Number of inspections Number of units shipped In addition, management estimated 45,000 direct labor-hours for year 2. Assume that the following cost-driver volumes occurred in January, year 2: Estimated Cost $ 122,400 227,200 220,920 76,130 440,100 1,062,000 $ 2,148,750 Estimated Cost Driver Activity 240 purchase orders $ 2,840,000 120 runs 15,226 hours 54 inspections 590,000 units Number of units produced Direct labor-hours Number of purchase orders Silver 32,000 2,000 7 Gold Platinum 10,000 1,200 6 3,000 400 3 Direct materials costs $ 97,500 $ 60,000 $ 37,500 Number of production runs 2 3 5 Machine-hours 700 175 100 Number of inspections 0 2 Units shipped 32,000 10,000 3 3,000 Labor costs are based on the contractual rate of $25 per hour. Required: a. Compute the predetermined rate for year 2 for use in the current product-costing system using direct labor-hours as the allocation base. b. Compute the per-unit production costs for each model for January using direct labor-hours as the allocation base and the predetermined rate computed in requirement (a). c. Compute the predetermined overhead rate for year 2 for each cost driver using the estimated costs and estimated cost driver units A Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct labor-hours. The plant controller has recommended that the company switch to an activity-based costing system. The controller's staff prepared the following cost estimates for next year (year 2) for the recommended cost drivers. Activity Purchasing material Receiving material Setting up equipment Machine depreciation and maintenance Ensuring regulatory compliance Shipping Total estimated cost Recommended Cost Driver Number of purchase orders Direct materials cost Number of production runs Machine-hours Number of inspections Number of units shipped In addition, management estimated 45,000 direct labor-hours for year 2. Assume that the following cost-driver volumes occurred in January, year 2: Estimated Cost $ 122,400 227,200 220,920 76,130 440,100 1,062,000 $ 2,148,750 Estimated Cost Driver Activity 240 purchase orders $ 2,840,000 120 runs 15,226 hours 54 inspections 590,000 units Number of units produced Direct labor-hours Number of purchase orders Silver 32,000 2,000 7 Gold Platinum 10,000 1,200 6 3,000 400 3 Direct materials costs $ 97,500 $ 60,000 $ 37,500 Number of production runs 2 3 5 Machine-hours 700 175 100 Number of inspections 0 2 Units shipped 32,000 10,000 3 3,000 Labor costs are based on the contractual rate of $25 per hour. Required: a. Compute the predetermined rate for year 2 for use in the current product-costing system using direct labor-hours as the allocation base. b. Compute the per-unit production costs for each model for January using direct labor-hours as the allocation base and the predetermined rate computed in requirement (a). c. Compute the predetermined overhead rate for year 2 for each cost driver using the estimated costs and estimated cost driver units A