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EcoFabrics has budgeted overhead costs of $$1,105,650.$ It has assigned overhead on a plantwide basis to its

two products $($wool and cotton$)$ using direct labor hours which are estimated to be $526,500$ for the current

year. The company has decided to experiment with activity$-$based costing and has created two activity cost

pools and related activity cost drivers. These two cost pools are cutting $($cost driver is machine hours$)$ and

design $($cost driver is number of setups$).$ Total estimated machine hours is $234,000,$ and total estimated

number of setups is $1,755.$ Overhead allocated to the cutting cost pool is $$421,200$ and $$684,450$ is allocated

to the design cost pool. Additional information related to product usage by these pools is as follows.

$($a$1)$

Calculate the overhead rate using activity based costing. $($Round per machine hour to $2$ decimal

places, e$.$g$.12\mathrm{.}25.)$

Overhead rates for activity$-$based costing

Cutting $ per machine hour

Design

$

per setup

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