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Fontillas Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, it produced 50 range instruments and 200 pressure gauges and
Fontillas Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, it produced 50 range instruments and 200 pressure gauges and incurred estimated overhead costs of $94,620. An analysis of estimated overhead costs reveals the following activities: Activities 1. Material handling 2. Machine set-ups 3. Quality inspections Cost Drivers Number of requisitions Number of set-ups Number of inspections Total Cost $34,440 28,500 31,680 $94,620 The cost driver volume for each product was as follows: Total Instruments Gauges 560 670 Cost Drivers Number of requisitions Number of set-ups Number of inspections 1,230 500 190 310 220 440 660 Determine the overhead rate for each activity. The overhead rates are: Activity Cost Pool Rate Material handling per requisition $ Machine set-ups per set-up $ Inspections per inspection $ Assign the manufacturing overhead costs for April to the two products using activity-based costing. Instruments Gauges Overhead cost per unit $ $
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