Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Health Co-op is an outpatient surgical clinic that wants to better understand its costs. It decides to prepare an activity-based cost analysis, including an estimate of the average cost of both general surgery and orthopedic surgery. The clinics three cost centers and their cost drivers follow.

Production Activity Grinding Polishing Product modification Providing power System calibration Indirect Labor Indirect Materials Other Overhead $360,000 600,000 580,000 $185,000 $260,000 Additional information on the drivers for its production activities follows Grinding and Polishing Product modification Providing power System calibration 12,000 machine hours 1,300 engineering hours 18,000 direct labor hours 1,050 batches Required: 1. Compute the activity overhead rates using ABC. Form cost pools as appropriate Activity Overhead Cost Activity Drivers Activity Rate Grinding and Polishing Product modification Providing power System calibration Machine hours Engineering hrs Direct labor hrs batches 0 per machine hour 0 per engineering hour 0 per direct labor hour 0 per batch Prev 4 of 4 Next>