Problem $4-12$ Contrasting ABC and Conventional Product Cost $[$LO$4-2,$ LO$4-3,$ LO$4-4]$

Precision Manufacturing Inc. $($PMI$)$ makes two types of industrial component parts$-$the EX$300$ and the TX$500.$ It annually produces

$55,000$ units of EX$300$ and $12,000$ units of TX$500.$ The company's conventional cost system allocates manufacturing overhead to

products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the

company's two product lines is shown below:

The company is considering implementing an activity$-$based costing system that distributes all of its manufacturing overhead to four

activities as shown below:

Required:

$1-$a$.$ Compute the plantwide overhead rate that would be used in the company's conventional cost system.

$1-$b$.$ Using the plantwide rate, compute the unit product cost for each product.

$2-$a$.$ Compute the activity rate for each activity cost pool.

$2-$b$.$ Using the activity rates, compute the unit product cost for each product.

Complete this question by entering your answers in the tabs below.

Req $2A$

Compute the activity rate for each activity cost pool. $($Round your Machining and General factory activity rates to $2$ decimal

places.$)$