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Stuart Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q.
Stuart Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: Activity Pools Repair and maintenance on assembly machine Programming cost Software inspections Product testing Total overhead cost Expected activity for each product follows: Cost Pool Total $ 72,800 96,400 7,750 Cost Driver Number of units produced Number of programming hours Number of inspections 7,260 Number of tests $ 184,210 Number of Number of Programming Number of Number of Units Hours Inspections Tests Decoder P 20,000 2,200 190 1,500 Decoder Q 36,000 1,800 120 1,800 Total 56,000 4,000 310 3,300 Required a. Compute the overhead rate for each activity pool. b. Determine the overhead cost allocated to each product. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute the overhead rate for each activity pool. Note: Round your answers to 2 decimal places. Activity Pools Repair and maintenance on assembly machine Programming cost Software inspections Product testing Allocation Rate $ 72,800.00 96,400.00 7,750.00 7,260.00 Required A Required B < Prev 2 of 2 Next
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