The activity base associated with the two production departments is direct labor hours. The… 1 answer below »

The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows:1ActivityBudgeted Activity CostActivity Base2Production control$237,000.00Number of production runs3Materials handling270,000.00Number of moves4Total$507,000.00The activity-base usage quantities and units produced for the two products follow:Number ofNumber ofDirect Labor Hours—Direct Labor Hours—UnitsProduction RunsMovesCuttingFinishingProducedSnowboards4305,0004,0002,0006,000Skis702,5002,0004,0006,000Total5007,5006,0006,00012,000Required:1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is $315,000 and $540,000 for the Cutting and Finishing departments, respectively.* **2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1).* **Complete the Activity Tables for snowboards and skis.3. Determine theactivity rates, assuming that the indirect labor is associated with activities rather than with the production departments.*4. Determine the total and per-unit cost assigned to each product underactivity-based costing.*5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.* If required, round your answers to two decimal places.** Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.XAmount DescriptionsAmount DescriptionsCutting DepartmentFinishing DepartmentProduction ControlMaterials HandlingSetupsSkisSnowboardsXFactory Overhead Rates1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is $315,000 and $540,000 for the Cutting and Finishing departments, respectively. If required, round your answers to two decimal places. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.1DepartmentProduction Department Rate2per direct labor hour3per direct labor hourXFactory Overhead Costs2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). If required, round your answers to two decimal places. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.1ProductTotal Factory OverheadFactory Overhead Per Unit23XActivity Table – SnowboardsComplete the Activity Tables for snowboards and skis.3. Determine theactivity rates, assuming that the indirect labor is associated with activities rather than with the production departments.*4. Determine the total and per-unit cost assigned to each product under activity-based costing.** If required, round your answers to two decimal places.SnowboardsActivityActivity-ActivityActivityUsageXRate=CostProduction control Materials handling Cutting Department Finishing Department Total÷ Number of units÷Activity cost per unitXActivity Table – SkisComplete the Activity Table for skis.3. Determine theactivity rates, assuming that the indirect labor is associated with activities rather than with the production departments.*4. Determine the total and per-unit cost assigned to each product under activity-based costing.** If required, round your answers to two decimal places.SkisActivityActivity-ActivityActivityUsageXRate=CostProduction control Materials handling Cutting Department Finishing Department Total÷ Number of units÷Activity cost per unitXFinal Question5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods. Check all that apply.The activity-based method separately accounts for the production control and materials handling activity costs, decreasing cost distortion.Snowboards have fewer production control and number of moves than do skis, so skis have higher activity costs per unit.The activity-based overhead allocation reveals that snowboards are more costly on a per-unit basis than are the skis.The multiple production department factory overhead rate method distorts the unit costs.