ACTIVITY RATES Johanssen Company uses activity-based costing (ABC). Johansson manufactures outdoor water toys using two activities: plastic injection molding and decal application.

Johansson’s 2009 total budgeted overhead costs for these two activities are $250,000

(70 percent for injection molding and 30 percent for decal application). Molding overhead costs are driven by the number of pounds of plastic that are molded together. Decal application overhead costs are driven by the number of decals applied to toys. The budgeted activity data for 2008 are as follows:

Pounds of plastic molded 1,750,000 Number of decals applied 187,500 Required:

. Calculate the activity rate for the plastic injection molding activity.

. Calculate the activity rate for the decal application activity.

Exercise