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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 company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Expected Overhead Activity Measure Cost Direct labor-hours $ 19,250 Number of orders $ 1,820 Number of tests $ 6,320 Number of templates $ 960 Machine-hours $ 68,600 Expected Activity 1,375 DLHs 455 orders 395 tests 40 templates 9,800 MHs Required: 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Activity Rate per DLH per order per test per template per MH
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