Imelda Instruments Ltd manufactures two products: missile range instruments and space pressure gauges. During January, 53 range instruments and 360 pressure gauges were produced, and overhead costs of $81 480 were incurred. An analysis of overhead costs reveals the following activities.

Required

(a) Determine the overhead rate for each activity.

(b) Assign the manufacturing costs for January to the two products using activity-based costing.

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Activity Materials handling Cost driver Number of requisitions Number of set-ups Total cost $25 500 30680 25 300 Machine set-up Quality inspections Number of inspections The cost driver volume for each product was as follows. Cost driver Number of requisitions Number of set-ups Number of inspections Instruments Gauges Total 410 610 1 020 250 270 520 160 390 550