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16) Lyons Industries manufactures two products: mole traps and mouse traps. The manufacturing operation involves three overhead activities-production setup, material handling, and general factory activities.
16) Lyons Industries manufactures two products: mole traps and mouse traps. The manufacturing operation involves three overhead activities-production setup, material handling, and general factory activities. Because they are a sophisticated company, Lyons uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities: Activity Production setup Material handling General overhead Cost $160,000 $180,000 $120,000 Activity Base Number of setups Number of parts Number of direct labor hours Each product's total activity in each of the three areas are as follows: Number of setups Number of parts Number of direct labor hours Mole Traps 100 40,000 8,000 Mouse Traps 300 20,000 12,000 Required: What is the activity rate for production setup? (3 points) What is the activity rate for material handling? (3 points) What is the activity rate for general overhead? (3 points] What is the total overhead allocated to Mole Traps using activity-based costing? (6 points)
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