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Munoz Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because
Munoz Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: Activity Pools Repair and maintenance on assembly machine Programming cost Software inspections Product testing Total overhead cost Cost Pool Total $100,700 89,280 6,240 11,880 $208,100 Cost Driver Number of units produced Number of programming hours Number of inspections Number of tests Expected activity for each product follows: Number of Units 24,000 29,000 53,000 Decoder P Decoder Q Total Number of Programming Hours 1,700 1,900 3,600 Number of Inspections 189 Number of Tests 1,300 2,000 3,300 71 260 Required a. Compute the overhead rate for each activity pool. b. Determine the overhead cost allocated to each product
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