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Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. T

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Answer:

Cost pool Cost Diver Estimated
Overhead
÷ Total
Activity
= Rate
Ordering Number of orders $117,000 ÷ 260,000 = $0.45 per order
Machine Setups Number of setups $51,000 ÷ 340,000 = $0.15 per setup
Inspection Number of inspections $64,000 ÷ 64,000 = $1.00 per inspection

Calculations:

Wholesale + Retail = Total Activity
Ordering 200,000 + 60,000 = 260,000
Machine Setups 220,000 + 120,000 = 340,000
Inspection 50,000 + 14,000 = 64,000
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