Accounting-There are two questions and two problems

There are two questions and two problems. Questions1. Why are overhead costs allocated to products, individual jobs or services and not traceddirect to products, individual jobs or services as direct materials and direct labor are?2. What are three common methods of assigning overhead costs to a product, job or service?P2. Ray R. Inc manufactures closed circuit security cameras. The company has budgetedmanufacturing overhead costs for the year as follows: Type of Cost by Cost PoolElectric powerInspections &amp, Testing CostsTotal Manufacturing OverheadBudgeted Overhead$250,000150,000$400,000Under a traditional or single plant-wide cost system, the company uses machine hours to allocatethe total plant-wide overhead above. The company had estimated that its production activitieswould require 1,000 machine hours for the same year. (Hint: Use this data for part 1). The company is considering changing to an activity based costing (ABC) system. As part of itconsideration of the new costing system, the company has developed the following estimates forthe current upcoming year: Type of CostElectric power for plantInspections &amp, Testing(Hint: Use this data for part 2). Activity Based Cost Drivers50,000 kilowatt hours (KWH)1,000 inspections (INSP)The following information related to the production of 200 units of one of its security cameramodels. Direct materialsDirect labor costs$50,000$75,000Actual machine hoursDirect labor hoursActual Electric power in kilowatt hoursActual number of inspections705,0006,00010Part 1. Calculate the total cost of the 200 units produced and the cost per camera (per unit)assuming the company will allocate overhead to this batch of cameras using a plant-wide costsystem. Use the template below. Hint: You will need to first calculate the company’s plant-widepredetermined overhead rate than allocate a portion of the total overhead to this particular batchof cameras that were produced. You must show your work to receive credit. Check figure: Cost per unit is more than $740 but less than $780. Overhead Rate per MH$__________Cost of 200 units produced: Direct materialsDirect laborApplied overhead—————Total Cost=========Calculated Cost per unit$__________Part 2. Calculate the total cost of the 200 units produced and the cost per camera (per unit)assuming the company will allocate overhead using an activity based costing (ABC) system. Usethe template below. Hint: You will need to first calculate the company’s overhead rates for thetwo separate cost pools than allocate a portion of each cost pool to this particular batch ofcameras that were produced. You must show your work to receive credit. Check figure: Cost per unit is more than $775 but less than $790. Electric power overhead rate (per KWH)$__________Inspection cost overhead rate (per INSP)$__________Cost of 200 units produced: Direct materialsDirect laborApplied overhead: —————Total Cost=========Calculated Cost per unit$__________