1. Using the data presented at the beginning of Problem 36, calculate the predetermined overhead rate for each activity.

2. The following activity associated with the desk product was reported for the month of March.

   Number of purchase orders processed	40
   Number of machine setups	22
   Number of machine hours	2,425
   Number of quality inspections	890

   Using the predetermined overhead rates calculated in requirement a, determine the amount of overhead applied to the desk product for the month of March.

3. Make the journal entry to record overhead applied to the desk product for the month of March.
4. Assume you are the manager of the desk product line and would like to reduce the amount of overhead costs being applied to your products. Which activity would you focus on first? Why?

Necessary Data from Problem 36:

36. Activity-Based Costing Versus Traditional Approach, Activity-Based Management. Quality Furniture, Inc., produces a wood desk that sells for $500 and a wood table that sells for $900. Last year, total overhead costs of $6,000,000 were allocated based on direct labor costs. Direct labor costs totaled $2,000,000 last year, and Quality Furniture produced 15,000 desks and 5,000 tables. Total direct labor and direct materials costs by product for last year were as follows: The management of Quality Furniture would like to use activity-based costing to allocate overhead rather than one plantwide rate based on direct labor costs. The following estimates are for the activities and related cost drivers dentified as having the greatest impact on overhead costs