Activity-based costing requires a cost driver for each cost pool. Use the following information to assign the costs to the product lines using the activity-based costing approach. Driver Amount Activity Cost Pools Cost Drivers for Composite Kayaks Driver Amount for Rotomolded Kayaks Designing new models Number of models 3 1 Creating and testing prototypes Number of prototypes 6 2 Creating molds for kayaks Number of molds 12 1 Supervising production employees Number of employees 12 12 Curing time Number of days of curing time 16,000 2,000 What amount of overhead should be assigned to each composite kayak using this method? What amount of overhead should be assigned to each rotomolded kayak using this method? (Round cost assigned per unit to 2 decimal places, e.g. 125.25.) Total cost assigned Cost assigned per unit 1A Composite 662000 662 Rotomolded (A $ to 200000 50 As you learned in the previous chapters, Current Designs has two main product lines-composite kayaks, which are handmade and very labor-intensive, and rotomolded kayaks, which require less labor but employ more expensive equipment. Current Designs' controller, Diane Buswell, is now evaluating several different methods of assigning overhead to these products. It is important to ensure that costs are appropriately assigned to the company's products. At the same time, the system that is used must not be so complex that its costs are greater than its benefits. Diane has decided to use the following activities and costs to evaluate the methods of assigning overhead. Activities Cost Designing new models Creating and testing prototypes $120,000 144,000 Creating molds for kayaks 208,000 Operating oven for the rotomolded kayaks 38,000 Operating the vacuum line for the composite kayaks 27,000 192,000 Supervising production employees Curing time (the time that is needed for the chemical processes to finish before the next step in the production process; many of these costs are related to the space required in the building) Total 198,000 $927,000 As Diane examines the data, she decides that the cost of operating the oven for the rotomolded kayaks and the cost of operating the vacuum line for the composite kayaks can be directly assigned to each of these product lines and do not need to be assigned with the other costs. For purposes of this analysis, assume that Current Designs uses $227,000 in direct labor costs to produce 1,000 composite kayaks and $311,750 in direct labor costs to produce 4,000 rotomolded kayaks each year.