M4-8 Calculating Activity Rates for ABC System [LO 44] Lakeside Inc. manufacture

Question

M4-8 Calculating Activity Rates for ABC System [LO 44] Lakeside Inc. manufactures four lines of remote control boats and uses activity-based costing to calculate product cost. Activity Cost Pools Machining Setup Quality control Estimated Total Cost S 334,000 63,000 Estimated Cost Driver 13,300 machine hours 350 batches 780 inspections Compute the activity rates for each of the following activity cost pools: (Round your answers to 2 decimal places.) per Machine Machining Setup Costs Quality Control Hour per Batch per Inspection

Explanation / Answer

Calculate activity rate :

Machining (334000/13300) $25.11 per machine hour Setup (63000/350) $180 per batch Quality control (86000/780) $110.26 per inspection

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