Question

Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Activity Cost Pool Estimated Overhead Cost Expected Activity Labor-related $ 19,600 10,000 direct labor-hours Machine-related $ 7,000 7,000 machine-hours Machine setups $ 23,400 600 setups Production orders $ 16,500 500 orders Product testing $ 22,400 800 tests Packaging $ 62,900 3,700 packages General factory $ 60,000 10,000 direct labor-hours Required: 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)

Answer 1

Answer:

Instructions are listed below

Explanation:

Giving the following information:

The company's activity-based costing system has the following seven activity cost pools:

Labor-related $ 19,600 10,000 direct labor-hours

Machine-related $ 7,000 7,000 machine-hours

Machine setups $ 23,400 600 setups

Production orders $ 16,500 500 orders

Product testing $ 22,400 800 tests

Packaging $ 62,900 3,700 packages

General factory $ 60,000 10,000 direct labor-hours

Activity rate= total estimated activity cost for the period/ total amount of allocation base:

Labor-related= 19600/10000= $1.96

Machine related= 7000/7000= $1

Machine setups= 23400/ 600= $39

Production orders= 16500/500= $33

Product testing=  22400/800= $28

Packaging= 62900/3700= $17

General factory= 60000/10000= $6