Your company manufactures two products, A and B. In one month, some 200 of A were produced and 1,000 of B. Overheads were incurred amounting to $250,000. Main activities and cost drivers have been identified as follows:

Activity Cost driver Total cost Stores Number of orders 100,000 Machine costs and power Machine hours 80,000 Quality control Number of inspections 70,000 250,000 The cost drivers relating to each product are as shown below:

Cost driver Product A Product B Total Number of orders 500 1,500 2,000 Machine hours 4,000 4,000 8,000 Number of inspections 1,000 3,000 4,000

(a) Calculate the overhead rate for each activity.