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Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the
Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the companys five activity cost pools:
Activity Cost Pool | Activity Measure | Expected Overhead Cost | Expected Activity | ||
Labor-related | Direct labor-hours | $ | 23,680 | 1,480 | DLHs |
Purchase orders | Number of orders | $ | 860 | 430 | orders |
Product testing | Number of tests | $ | 6,205 | 365 | tests |
Template etching | Number of templates | $ | 1,400 | 50 | templates |
General factory | Machine-hours | $ | 39,750 | 7,950 | MHs |
Required:
1. Compute the activity rate for each of the activity cost pools.
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