Refer to Short Exercise 18-7. The president of Pacific suspects that her allocation of indirect costs could be giving misleading results, so she decides to develop an ABC system. She identifies three activities: documentation preparation, information technology support, and training. She figures that documentation costs are driven by the number of pages, information technology support costs are driven by the number of software applications used, and training costs are driven by the number of direct labor hours worked. Estimates of the costs and quantities of the allocation bases follow:

Requirement
1. Compute the cost allocation rate for eachactivity.

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Estimated Quantity of Allocation Base 3,000 pages 780 applications 4,700 hours Estimated Cost $ 102,000 156,000 Applications used 517,000 Dircct labor hours $ 775,000 Allocation Base Pages Activity Documentation preparation Information technology support Training Total indirect costs