Homework Answers
Requirement 1
| Activity rate | ||
| Labor related | $ 22.00 | Per Direct labor hour |
| Machine related | $ 1.25 | Per Machine hour |
| Machine setup | $ 45.00 | Per Setups |
| Production orders | $ 49.00 | Per Order |
| Product testing | $ 31.00 | Per test |
| Packaging | $ 19.00 | Per package |
| General factory | $ 56.80 | Direct labor hour |
.
Requirement 2
Predetermined overhead rate= $250.50
Working
| Calculation of Activity rates | |||||
| Activity Cost Pool | Activity driver | Overhead Cost (A) | Expected Activity (B) | Activity rate (A/B) | |
| Labor related | Number of Direct labor hour | $ 22,000 | 1000 | $ 22.00 | Per Direct labor hour |
| Machine related | Number of Machine hour | $ 10,000 | 8000 | $ 1.25 | Per Machine hour |
| Machine setup | Number of Setups | $ 36,000 | 800 | $ 45.00 | Per Setups |
| Production orders | Number of Order | $ 29,400 | 600 | $ 49.00 | Per Order |
| Product testing | Number of test | $ 27,900 | 900 | $ 31.00 | Per test |
| Packaging | Number of package | $ 68,400 | 3600 | $ 19.00 | Per package |
| General factory | Number of Direct labor hour | $ 56,800 | 1000 | $ 56.80 | Direct labor hour |
.
| Manufacturing Overhead (A) | $ 250,500 |
| Direct labor hours (B) | 1000 |
| Predetermined Overhead rate | $ 250.50 |
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