Brooklyn Cycles produces custom bicycles and has used a traditional manufacturing overhead application rate based on direct labor hours. Currently, overhead is applied at the rate of $26/DLH. Brooklyn is now considering using activity-based driver rates to improve manufacturing overhead costing accuracy.
Budgeted manufacturing overhead costs for expected driver activity are:

Required:
Calculate manufacturing overhead rates that would be applied to bicycles produced using activity-based costing, and explain how Brooklyn Cycles could achieve improved costingaccuracy.

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Budgeted Cost Machining time. Direct labor time nspection time $250,000 $280,000 time.32,000 Budgeted Activity 10,000 hours 20,000 hours 4,000 hours