BRIEF EXERCISE $5-2$

Computing Activity Rates $[$LO$1-$ CC$1$; LO$2-$ CC$6]$

Kramer Corporation is a diversified manufacturer of consumer goods. The cotpany$\text{'}$s activity$-$based costing system has the following seven activity cost pools:

$\backslash$table$[[$Activity Cost Pool,Estimated Overhead Cost,Expected Activity,$],[$Labour related,$$48,000,30,000,$direct labour$-$hours$],[$Machine related,$67,500,10,000,$machine$-$hours$],[$Machine setups,$90,000,600,$setups$],[$Production orders,$112,000,3,500,$orders$],[$Product testing,$59,400,1,800,$tests$],[$Packaging$,76,500,4,500,$packages$],[$General factory,$672,000,30,000,$direct labour$-$hours$]]$

Page $210$

Required:

Compute the activity rate for each activity cost pool.

Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide, predetermined overhead rate based on direct labour$-$hours.