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Rustafson 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
Rustafson 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 | $ 28,000 | 2,000 | direct labor-hours |
Machine-related | $ 5,000 | 10,000 | machine-hours |
Machine setups | $ 45,000 | 1,000 | setups |
Production orders | $ 30,000 | 600 | orders |
Product testing | $ 27,200 | 800 | tests |
Packaging | $ 64,600 | 3,800 | packages |
General factory | $ 51,200 | 2,000 | direct labor-hours |
Required:
1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.
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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.)
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