Question

and overhead costs of $94,500 were estimated An 21,000 Number of inspections of Number of setups

Answer 1

Answer:

(a)

Determine the overhead rate for each activity.

Materials handling: $50,000 / 1000= $50.

Machine setup: $21,000 / 500 = $42.

Quality inspections: $33,000 / 750 = $44

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(b)

Assign the manufacturing overhead costs for April to the two products using activity-based costing

Instruments

	Activity	Rate	Total Cost
	A	B	C=A*B
Requisition	400	50	20000
Setups	200	42	8400
Inspection	200	44	8800
Total			37200
Per unit overhead cost: $37,200 / 50			744

Gauges

	Activity	Rate	Total Cost
	A	B	C=A*B
Requisition	600	50	30000
Setups	300	42	12600
Inspection	400	44	17600
Total			60200
Per unit overhead cost: $60,200 / 300			201