Johnson Manufacturing anticipates incurring $850,000 in overhead costs this year. After implementing activity-based costing (ABC), the company's controller identified the following related information:

Activity	Allocation Base	Proportion of Overhead Cost
Purchasing	Number of purchase orders	20%
Machine setups	Number of setups	15%
Production	Number of machine hours	65%

The number of activities expected is as follows:

Total number of purchase orders	4,800
Total number of setups	2,400
Total number of machine hours	22,100

Refer to the Johnson Manufacturing information above. What will be the overhead rate for the production activity?

Select one:

a. $50.00 per machine hour

b. $25.00 per machine hour

c. $42.25 per machine hour

d. $60.00 per machine hour

Refer to the Johnson Manufacturing information above. How much total overhead would be applied to a job that required 2 purchase order, 4 setups, and 400 machine hours?

Select one:

a. $14,413.45

b. $14,723.55

c. $10,280.00

d. $14,005.64

Which of the following statements is true regarding activity-based costing (ABC)?

Select one:

a. It is based on the concept that a single cost driver can drive all overhead costs.

b. It is based on the concept that either the number of direct labor or machine hours incurred drives all overhead costs.

c. It is based on the concept that unit-level costs drive all overhead costs.

d. It is based on the concept that activities drive overhead costs.

Which of the following statements associated with traditional overhead allocation is true?

Select one:

a. A traditional overhead allocation method is the most accurate in automated environments with diverse products.

b. A traditional overhead allocation method provides the most accurate product cost information.

c. A traditional overhead allocation method can also be referred to as activity-based costing.

d. A traditional overhead allocation method usually uses one or two volume-based cost drivers.