College Supply Company (CSC) makes three types of drinking glasses: short, medium, and tall. It presently applies overhead using a predetermined rate based on direct labor-hours. A group of company employees recommended that CSC switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for Year 5 for each activity center. Activity Recommended Cost Driver Number of Estimated Cost Setting up production production runs $ 22,400 Estimated Cost Driver Units 80 runs Processing orders Number of orders 46,800 180 orders Pounds of Handling materials 14,000 7,000 pounds Using machines Providing quality materials Number of Machine-hours 50,000 10,000 hours management inspections 56,000 40 inspections Packing and shipping Units shipped 42,000 21,000 units $231,200 In addition, management estimated 2,000 direct labor-hours for year 5. Assume that the following cost driver volumes occurred in February, year 5. Short Medium Tall Number of units 900 400 500 produced Direct materials costs $5,000 $3,000 $2,500 Direct labor-hours 100 100 120 Number of orders 8 7 3 Number of production runs 2 5 7 Pounds of material 300 700 200 Machine-hours 400 300 200 Number of inspections 1 2 2 Units shipped 900 400 400 Direct labor costs were $20 per hour. Required: a. Compute a predetermined overhead rate for year 5 for each cost driver recommended by the employees. Also compute a predetermined rate using direct labor-hours as the allocation base. b. Compute the production costs for each product for February using direct labor-hours as the allocation base and the predetermined rate computed in requirement a. c. Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requirement a. (Note: Do not assume that total overhead applied to products in February will be the same for activity-based costing as it was for the labor-hour-based allocation.) Complete this question by entering your answers in the tabs below. Required Required Required A B C Compute a predetermined overhead rate for year 5 for each cost driver recommended by the employees. Also compute a predetermined rate using direct labor-hours as the allocation base. (Round your answers to 2 decimal places.) Activity Setting up production Allocation Rate per run Show less▲ Direct labor costs were $20 per hour. Required: a. Compute a predetermined overhead rate for year 5 for each cost driver recommended by the employees. Also compute a predetermined rate using direct labor-hours as the allocation base. b. Compute the production costs for each product for February using direct labor-hours as the allocation base and the predetermined rate computed in requirement a. c. Compute the production costs for each product for February using the cost drivers recommended by the employees and the predetermined rates computed in requirement a. (Note: Do not assume that total overhead applied to products in February will be the same for activity-based costing as it was for the labor-hour-based allocation.) Complete this question by entering your answers in the tabs below. Required Required Required A B C Compute the production costs for each product for February using direct labor-hours as the allocation base and the predetermined rate computed in requirement a. (Do not round intermediate calculations.) Direct materials $ Direct labor Overhead Total costs Short Medium 5,000 $ 3,000 $ Tall 2,500 > Required A Required C > Show less▲