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Part $1$

Frances Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead$$ costs: materials$$ handling, machine$$ setup, insertion of$$ parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as$$ follows:

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Part $1$

Frances Company expects to produce $1$ comma $000$ chrome wheels during the year. The wheels are expected to use $3$ comma $000$parts$,$ require $20$setups$,$ and consume $2$ comma $000$ hours of finishing time.

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Part $1$

Requirement $1.$ Compute the cost allocation rate for each activity. First identify the$$ formula, then compute the rate for each activity.

Activity cost

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$=$

allocation rate