Computing overhead rates based on different costing drivers Chase Industries produces two surge protectors: VC620 with six outlets and PH630 with eight outlets and two telephone line connections. Because of these product differences, the company plans to use activity-based costing to allocate overhead costs. The company has identified four activity pools. Relevant information follows.

Expected activity for each product follows.

Required
a. Compute the overhead rate for each activity pool.
b. Determine the overhead cost allocated to each product.

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Cost Driver Activity Pools Machine setup Machine operation Quality control Packaging Total overhead cost Cost Pool Total Number of setups Number of machine hours Number of inspections Number of units $120,000 300,000 48,000 32,000 $500,000