Required information

Skip to question

[The following information applies to the questions displayed below.]

Gustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools:

Activity Cost Pool	Estimated Overhead Cost	Expected Activity
Labor-related	$ 23,200	8,000	direct labor-hours
Machine-related	$ 5,000	10,000	machine-hours
Machine setups	$ 36,000	1,200	setups
Production orders	$ 27,000	600	orders
Product testing	$ 23,400	900	tests
Packaging	$ 37,000	3,700	packages
General factory	$ 54,800	8,000	direct labor-hours

Required:

1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)

2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.)