Question

Required information Exercise 4-2 Compute Activity Rates (LO4-2] (The following information applies to the questions displayed below.) Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory Estimated Overhead Cost $ 22,000 $ 12,500 $ 25,600 $ 14,100 $ 38,000 $ 61,200 $ 57,600 Expected Activity 4,000 direct labor-hours 10,000 machine-hours 800 setups 300 orders 1,000 tests 3,400 packages 4,000 direct labor-hours Exercise 4-2 Part 1 Required: 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Rate per DLH per MH per setup Activity Cost Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory per order per test per package per DLH

Answer 1

--Requirement 1

Activity Cost Pool	Estimated	Expected	Activity rates = ANSWER
	Overhead Cost	Activity	Estimated cost / Estimated activity
Labor-related	$22,000	4000	$5.50
Machine-related	$12,500	10000	$1.25
Machine setups	$25,600	800	$32.00
Production orders	$14,100	300	$47.00
Product testing	$38,000	1000	$38.00
Packaging	$61,200	3400	$18.00
General factory	$57,600	4000	$14.40