Rawlings Corp. has two product lines, A and B. Rawlings has identified the follo

Question

Rawlings Corp. has two product lines, A and B. Rawlings has identified the following detailed information about its cost pools and cost drivers.

Cost pools
Material handling----------$49,610
Machine maintenance------$9,600

Cost drivers
Number of material moves-----410
Number of machine hours-----40,000

1. Calculate Rawlings activity rate for each cost pool. (Round your maintenance answer to 2 decimal places. Omit the "$" sign in your response.)

Activity rate
Materials Handling:$___________per material move
Machine Maintenance:$___________per machine hour

2. Determine the total amount of overhead assigned to Rawlings' products if they have the following requirements: (Omit the "$" sign in your response.)

---------------------------------------Product A----------Product B
Number of material moves----------210-----------------200
Number of machine hours----------16,500-------------23,500

Total overhead assigned
Product A:$___________
Product B:$___________

Explanation / Answer

1. Activity rate Materials Handling: = $49,610 /410 = $121 per material move Machine Maintenance: = $9,600/40,000 = $0.24 per machine hour 2. ---------------------------------------Product A----------Product B Number of material moves----------210-----------------200 Number of machine hours----------16,500-------------23,500 Total overhead assigned Product A = material moves * activity rate + machine hours * activity rate = 210*$121 + 16,500*.24 = $29,370 Product B: 200 *$121 + 23,500 *.24 = $29,840

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