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Terry Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because
Terry 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 Cost Pool Total Cost Driver Activity Pools Repair and maintenance on assembly machine Programming cost Software inspections Product testing $ 52,000 84,000 6,000 8,000 Number of units produced Number of programming hours Number of inspections Number of tests Total overhead cost $150,000 Expected activity for each product follows Number of Number of Inspections Number of Tests Number Programming of Units Decoder P 16,000 Decoder 36,000 Hours 2,000 1,500 190 1,400 60 1,100 Total 52,000 3,500 250 2,500 Required a. Compute the overhead rate for each activity pool. (Round your answers to 2 decimal places.) Allocation Rate Activity Pools Decoder P Decoder Q Repair and maintenance on assembly machine Programming cost Software inspections Product testing b. Determine the overhead cost allocated to each product. (Round intermediate calculations to2 decimal places.) Total Allocated Cost Decoder P Decoder
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