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YuYu is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the truck wheel
YuYu is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the truck wheel product line because of its complexity. He therefore develops the following three activity cost pools and related cost drivers to better understand these costs: Estimated Overhead Activity Cost Pools Estimated Use of Cost Drivers Costs Setting up machines 1.000 set-ups $540,000 Assembling 36,000 labour hours 288,000 Inspection 624 inspections 312,000 Calculate the activity-based overhead rates for these three cost pools. Cost Pool Setting up machines $ Assembling $ Inspection Rate per set-up per labour hr per inspection
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