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Precision Manufacturing Incorporated $($PMI$)$ makes two types of industrial component parts$$the EX$300$ and the TX$500.$ It annually produces $52,000$ units of EX$300$ and $11,700$ units of TX$500.$ The company$$s conventional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company$$s two product lines is shown below:

EX$300$ TX$500$ Total

Direct materials $ $358,325$ $ $154,550$ $ $512,875$

Direct labor $ $112,000$ $ $38,500$ $ $150,500$

The company is considering implementing an activity$-$based costing system that distributes all of its manufacturing overhead to four activities as shown below:

Activity Cost Pool $($and Activity Measure$)$ Manufacturing Overhead Activity

EX$300$ TX$500$ Total

Machining $($machine$-$hours$)$ $ $161,57582,00058,500140,500$

Setups $($setup hours$)81,60035220255$

Product$-$level $($number of products$)77,390112$

General factory $($direct labor dollars$)40,635$ $ $112,000$ $ $38,500$ $ $150,500$

Total manufacturing overhead cost $ $361,200$

Required:

$1-$a$.$ Compute the plantwide overhead rate that would be used in the company$$s conventional cost system.

$1-$b$.$ Using the plantwide rate, compute the unit product cost for each product.

$2-$a$.$ Compute the activity rate for each activity cost pool.

$2-$b$.$ Using the activity rates, compute the unit product cost for each product.

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