Bayline,Inc Other Product Information Is as Follows Required:

A

Bayline,Inc.manufactures two types of surf boards,Beginner and Longboard.Manufacturing overhead has been applied on the basis of direct labor hours.Bayline gathers some activity information and is interested in implementing an activity-based costing system.The company wants all overhead costs to be allocated to products.The overhead cost pools and activity drivers are as follows:
$$\begin{array}{lcl}\textbf { Activity Pool } & \textbf { Overhead Costs } & \textbf { Total Driver Usage } \\\hline \text { Machine setup } & \$ 36,000 & 1,000 \text { setups } \\\text { Cutting/Assembly } & \underline{62,000} & 31,000 \text { machine hours } \\\text { Total overhead costs } & \underline{\underline{\$ 98,000}} &\end{array}$$ Other product information is as follows:
$$\begin{array}{lcc} & \underline{\textbf { Beginner }} & \underline{\textbf { Longboard }} \\\text { Units produced } & 40,000 & 15,000 \\\text { Direct material } & \$ 10 \text { per unit } & \$ 25 \text { per unit } \\\quad \text { Direct labor } & \$ 8 \text { per unit } & \$ 10 \text { per unit } \\\text { Direct labor hours } & 6,000 & 8,000 \\\quad\text { Machine setups } & 750 & 250 \\\quad\text { Machine hours } & 20,000 & 11,000\end{array}$$

Required:

a. Using the traditional method, determine the overhead rate per direct labor hour.

b. Using the activity-based costing approach, determine the two activity rates.

c. Using the activity-based costing approach, determine the unit product cost for the Beginner board.