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. Management is considering using activity-based costing to apply manufacturing overhead cost to products for external financial reports. The activity-based costing system would have the
. | Management is considering using activity-based costing to apply manufacturing overhead cost to products for external financial reports. The activity-based costing system would have the following four activity cost pools: |
Activity Cost Pool | Activity Measure | Estimated Overhead Cost | |
Maintaining parts inventory | Number of part types | $ | 108,480 |
Processing purchase orders | Number of purchase orders | 212,000 | |
Quality control | Number of tests run | 304,120 | |
Machine related | Machine-hours | 64,680 | |
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$ | 689,280 | ||
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Expected Activity | |||
Activity Measure | Mono-Relay | Bi-Relay | Total |
Number of part types | 528 | 828 | 1,356 |
Number of purchase orders | 3,228 | 1,012 | 4,240 |
Number of tests run | 5,628 | 9,578 | 15,206 |
Machine-hours | 1,028 | 1,128 | 2,156 |
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Determine the activity rate for each of the four activity cost pools. |
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