QUESTION 6 Narayan Corporation has an activity-based costing system with three activity cost pools-Machining Setting Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below. Equipment depreciation......... Indirect labor ...... Total Activity Cost Pools Machining Setting Up $27,200 S6,800 2.500 1.000 $29.700 $7.800 Other $34,000 1,500 $35,500 Total $68,000 5,000 $73,000 Costs in the Machining cost pool are assigned to products based on machine-hours (MHS) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company's costs appear below: Product 29 Product Q2.......... Total ............... MHS 4,400 5,600 10,000 Batches 400 1.600 2.000 Sales (total) Direct materials (total).. Direct labor (total)... Product 29 $137,900 $59,700 $57,500 Product Q2 $173,300 $43,400 $96,000 ............ Required: a. Calculate activity rates for each activity cost pool using activity-based costing, b. Determine the amount of overhead cost that would be assigned to each product using activity-based costing, c. Determine the product margins for each product using activity-based costing