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Part 1

Fortunado,

Inc. uses activity-based costing to account for its chrome bumper manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the year and their allocation bases are as follows

Total Budgeted Cost	Allocation Base
Materials handling	$10,000	Number of parts
Machine setup	4,200	Number of setups
Insertion of parts	56,000	Number of parts
Finishing	78,000	Finishing direct labor hours
Total	$148,200

Fortunado

expects to produce

500

chrome bumpers during the year. The bumpers are expected to use

2,000

parts, require

10

setups, and consume

2,500

hours of finishing time.

Compute the predetermined overhead allocation rate for each activity.

Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Round your answers to the nearest cent.)

						Predetermined OH
					=	allocation rate