2. OH cost per unit $1,685

Turbo Champs Corp. uses activity-based costing to account for its motorcycle manufacturing process. Company managers have identified three supporting manufacturing activities: inspection, machine setup, and machine maintenance. The budgeted activity costs for 2018 and their allocation bases are as follows:

ActivityTotal Budgeted CostAllocation BaseInspections$ 5,700 Number of inspectionsMachine setup 22,000 Number of setupsMachine maintenance6,000 Finishing of machine hoursTotal$ 33,700

Turbo Champs expects to produce 20 custom-built motorcycles for the year. The motorcycles are expected to require 100 inspections, 40 setups, and 100 machine hours.

Requirements

1. Compute the predetermined overhead allocation rate for each activity.
2. Compute the expected indirect manufacturing cost of each motorcycle.