Compute the activity-based overhead rate for each activity cost pool. Activity-Based Overhead Rates Activities Cost Pools Market analysis Product design Product development Prototype testing per hour per design per product per test Ideal Manufacturing Company has supported a research and development (R&D) department that has for many years been the sole contributor to the company's new farm machinery products. The R&D activity is an overhead cost center that performs services only to in-house manufacturing departments (four different product lines), all of which produce agricultural/farm/ranch-related machinery products. The department has never sold its services to outside companies. But, because of its long history of success, larger manufacturers of agricultural products have approached Ideal to hire its R&D department for special projects. Because the costs of operating the R&D department have been spiraling uncontrollably, Ideal's management is considering entertaining these outside approaches to absorb the increasing costs. However, (1) management doesn't have any cost basis for charging R&D services to outsiders, and (2) it needs to gain control of its R&D costs. Management decides to implement an activity-based costing system in order to determine the charges for both outsiders and the in- house users of the department's services. R&D activities fall into four pools with the following annual costs. Market analysis Product design Product development Prototype testing $1,272,000 2,205,000 4,411,000 1,296,000 Activity analysis determines that the appropriate cost drivers and their usage for the four activities are: Total Activities Market analysis Product design Product development Prototype testing Cost Drivers Estimated Drivers Hours of aysis 15,900 hours Number of designs 2,450 designs Number of products110 products Number of tests 480 tests