Eric Parker has been studying his departments profitability reports for the past six months. He has just completed a managerial accounting course and is beginning to question the companys approach to allocating overhead to products based on machine hours. The current department overhead budget of $766,095 is based on 34,500 machine hours. In an initial analysis of overhead costs, Eric has identified the following activity cost pools.

Cost Pool		Expected Cost				Expected Activities
Product assembly			$	277,725		34,500	Machine hours
Machine setup and calibration				230,950		1,550	setups
Product inspection				126,380		1,780	batches
Raw materials storage				131,040		546,000	pounds
			$	766,095

(a) Calculate the companys overhead rate based on machine hours. (Round answer to 2 decimal places, e.g. 15.25.)

Overhead rate

$ / MH

(b) Calculate the companys overhead rates using the proposed activity-based costing pools. (Round answers to 2 decimal places, e.g. 15.25.)

Product assembly		$ / MH
Machine setup and calibration		$ / setup
Product inspection		$ / batch
Raw materials storage		$ / lb.