Oriole International Inc. of Montreal has supported a research and development (R&D) department that for many years has been the sole contributor to the company's new products. The R&D activity is an overhead cost centre that provides services only to in-house manufacturing departments (four different product lines), all of which produce aerospace-related products. The department has never sold its services outside, but because of its long history of success, larger manufacturers of aerospace products have approached Oriole to hire its R&D department for special projects. Because the costs of operating the R&D department have been spiralling uncontrollably, Oriole's management is considering taking on these outside contracts to absorb the increasing costs. However, managers don't have any cost basis for charging R&D services to outsiders, and they need to gain control their R&D costs. Management decides to implement an activity-based costing system in order to determine the charges for both outsiders and the in-house users of the department's services. R&D activities fall into four pools with the following annual costs: Market analysis Product design $862,500 1,929,900 Product development Prototype testing $2,950,010 1,150,050 Analysis determines that the appropriate cost drivers and their usage for the four activities are as follows: Activities Cost Drivers Total Estimated Drivers Market analysis Hours of analysis 12,500 hours Product design Number of designs 2,100 designs Product development Prototype testing Number of products 70 products Number of tests 410 tests (a) Calculate the activity-based overhead rate for each activity cost pool. Market analysis $ 69 per hour of analysis Product design $ 919 per design Product development $ 42142.86 per product Prototype testing $ 2805 per test Save for Later Attempts: 0 of 1 used Submit Answer