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Exercise 17-9 (Part Level Submission) Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 54 range instruments and 305
Exercise 17-9 (Part Level Submission) Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 54 range instruments and 305 pressure gauges were produced, and overhead costs of $83,955 were estimated. An analysis of estimated overhead costs reveals the following activities. Activities Cost Drivers Total Cost 1. Materials handling 2. Machine setups 3. Quality inspections Number of requisitions Number of setups Number of inspections $37,000 24,735 22,220 $83,955 The cost driver volume for each product was as follows. Cost Drivers Instruments Gauges Total Number of requisitions Number of setups Number of inspections 390 190 250 610 1,000 295 255 485 505 (a) Determine the overhead rate for each activity Overhead Rate Materials handling Machine setups Quality inspections
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