Question

Exercise 4-2 Compute Activity Rates [LO4-2] [The following information applies to the questions displayed below. Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools Estimated Overhead Cost Expected Activity Activity Cost Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory 19,600 10,000 direct labor-hours $ 7,000 23,400 16,500 22,400 62,900 7,000 machine-hours 600 setups 500 orders 800 tests 3,700 packages 60,000 10,000 direct labor-hours Exercise 4-2 Part 1 Required 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)

Answer 1

Answer:

Explanation:

Labor related activity rate

= 19,600/10,000 = 1.96 per direct labor hour

Machine related activity rate = 7,000/7,000 = 1 per machine hour

Machine setups activity rate = 23,400/600 = 39 per setup

Production orders activity rate = 16,500/500 = 33 per order

Product testing activity rate = 22,400/800 = 28 per test

Packaging activity rate = 62,900/3700 = 17 per package

General activity rate = 60,000/10,000 = 6 per direct labor hour