The Chinese Teapot Company manufactures plastic and ceramic teapots. The company's western plant has changed from a labor-intensive operation to a robotics environment. As a result, management is considering changing from a direct-labor based overhead rate to an activity-based cost method. The controller has chosen the following activity cost pools and cost drivers for the factory overhead:

	Expected Overhead Cost	Cost Driver	Annual Cost Driver
Purchase orders	$300,000	Number of orders	15,000 orders
Set-up costs	$200,000	Number of set-ups	5,000 set-ups
Testing costs	$320,000	Number of tests	8,000 tests
Machine maintenance	$500,000	Machine hours	25,000 hours

REQUIRED:

a.	Compute the overhead rate for each cost driver.