Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The company identifies three activities in its manufacturing process: machine setups, machining, and inspections.
Machine setups:
Estimated annual overhead= $140,000
Cost driver= machine setups
Activity= 2,000 machine setups
Machining:
Estimated annual overhead= $240,000
Cost driver= machine hours
Activity= 24,000 machine hours
Insections:
Estimated annual overhead= $54,000
Cost driver= number of inspections
Activity= 1,200 inspections
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine setup:
Estimated manufacturing overhead rate= 140,000/2,000= $70 per machine setup
Machining:
Estimated manufacturing overhead rate= 240,000/24,000= $10 per machine hour
Inspection:
Estimated manufacturing overhead rate= 54,000/1,200= $45 per inspection
