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Terry Industries produces two electronic decoders, P and Q. Decoder Pis more sophisticated and requires more programming and testing than does Decoder Q. Because of
Terry Industries produces two electronic decoders, P and Q. Decoder Pis 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 Cost Pool Total Cost Driver Repair and maintenance on assembly machine $ 97,200 Number of units produced Programming cost 99,960 Number of programming hours Software inspections 6,720 Number of inspections Product testing 12.710 Number of tests Total overhead cost $216,590 Expected activity for each product follows. Number of Number Programming of Units Hours Decoder P 19,000 2,200 Decoder 35,000 2.000 Total 54,000 4,200 Number Number of Inspections of Tests 200 1,200 80 1.900 280 3,100 Required: a. Compute the overhead rate for each activity pool. (Round your answers to 2 decimal places.) Allocation Rate Activity Pools Decoder P Decoder Repair and maintenance on assembly machine Programming cost Software inspections Product testing b. Determine the overhead cost allocated to each product. (Round Intermediate calculations to 2 decimal places.) Total Allocated Cost Decoder P Decoder
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