Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 300 pressure gauges were produced, and overhead costs of $94,500 were estimated. An analysis of estimated overhead costs reveals the following activities.

Using the activities listed above, identify for each activity one or more cost drivers that might be used to assign overhead to Wilmington's five products. E4.9 (LO 2, 3), AP Writing Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 300 pressure gauges were produced, and overhead costs of $94,500 were estimated. An analysis of estimated overhead costs reveals the following . Activities 1. Materials handling 2. Machine setups 3. Quality inspections Cost Drivers Number of requisitions Number of setups Number of inspections Total Cost $40,000 21,500 33,000 $94,500 The cost driver volume for each product was as follows. Cost Drivers Instruments Number of requisitions 400 Number of setups 200 Number of inspections 200 Gauges 600 300 400 Total 1.000 500 600 Instructions a. Determine the overhead rate for each activity. b. Assign the manufacturing overhead costs for April to the two products using activity-based costing. c. Write a memorandum to the president of Air United explaining the benefits of activity-based costing