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S4-4 Compute activity cost allocation rates (Learning Objective 2) NatureMade Snacks produces different styles of sweet potato chips (ruffled, flat, thick- cut, gourmet) for

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S4-4 Compute activity cost allocation rates (Learning Objective 2) NatureMade Snacks produces different styles of sweet potato chips (ruffled, flat, thick- cut, gourmet) for different corporate customers. Each style of sweet potato chip requires different preparation time, different cooking and draining times (depending on desired fat content), and different packaging (single serving versus bulk). Therefore, NatureMade has decided to try ABC to better capture the manufacturing overhead costs incurred by each style of chip. NatureMade has identified the following activities related to yearly manufacturing overhead costs and cost drivers associated with producing sweet potato chips: Activity Preparation.... Cooking and draining Packaging Manufacturing Overhead $510,000 Cost Driver Preparation time $928,000 $400,000 Cooking and draining time Units packaged Compute the activity cost allocation rates for each activity assuming the following total estimated activity for the year: 8,500 preparation hours, 32,000 cooking and drain- ing hours, and 4 million packages.

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