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Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 200 pressure gauges were produced, and
Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 200 pressure gauges were produced, and overhead costs of $83,515 were estimated. An analysis of estimated overhead costs reveals the following activities.
Activities
Cost Drivers
Total Cost
1.Materials handlingNumber of requisitions
$31,465
2.Machine setupsNumber of setups
27,810
3.Quality inspectionsNumber of inspections
24,240
$83,515
The cost driver volume for each product was as follows.
Cost Drivers
Instruments
Gauges
Total
Number of requisitions3756401,015
Number of setups180335515
Number of inspections250255505
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