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Kramer Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Required: 1. Compute the
Kramer Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: |
Required: |
1. | Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) |
2. | Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide, predetermined overhead rate based on direct labour-hours. (Round your answer to 2 decimal places.) |
Estimated Activity Cost Pool Overhead Cost Labour related $ 48,000 Machine related 67,500 Machine setups 84,000 Production orders 112,000 Product testing 58,500 Packaging 90,000 General factory 672,000 Expected Activity 10,000 direct labour-hours 30,000 machine-hours 600 setups 4,000 orders 1,800 tests 4,500 packages 10,000 direct labour-hours Activity Cost Pool Labour related Machine related Machine setups Production orders Product testing Packaging General factory Activity Rate per direct labour-hour per machine-hour per setup per order per test per package per direct labour-hour Predetermined overhead rate per direct labour-hour
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