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Waterway Machining makes three products. The company's annual budget includes $1,146,100 of overhead. In the past, the company allocated overhead based on expected capacity
Waterway Machining makes three products. The company's annual budget includes $1,146,100 of overhead. In the past, the company allocated overhead based on expected capacity of 57,305 direct labor hours. The company recently implemented an activity-based costing system and has determined that overhead costs can be broken into four overhead pools: order processing, setups, milling, and shipping. The following is a summary of company information: Expected Cost Expected Activities Order processing $ 275,200 16,000 orders Setups 154,000 4,000 setups Milling 444,400 20,200 machine hours Shipping 272,500 25,000 shipments $ 1,146,100 (a) Calculate the company's traditional overhead rate based on direct labor hours. $ Overhead rate /DLH (b) Calculate the company's overhead rates for each of the activity-based costing pools. (Round answers to 2 decimal places, e.g. 15.25.) Order processing $ per order $ Setups per setup $ Milling per machine hour $ Shipping per shipment
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