A manufacturer uses activity-based costing to assign overhead costs to products.

Question

A manufacturer uses activity-based costing to assign overhead costs to products. Budgeted cost information for selected activities fer next year follows. Activity Purchasing Cleaning factory Providing utilities Expected Cost Cost Driver Expected Uaage of Coat Driver $201,400 36,000 81,160 Purchase orders Square feet Square feet 5,300 purchase orders 5, 800 aquare feet 5, 900 square feet Compute activity rates for each of the cost pools. (Round your answers to 2 decimal places.) Expected Costs Amount of Cost Driver Activity cost pool Activity Overhead Rate 5,300 per purchaso order Purchasing Factory 5,800per square foot

Explanation / Answer

Compute activity rate :

Activity cost pool Expected costs Expected amount of cost driver Activity overhead rates Purchasing 201400 5300 38 per purchase order Cleaning factory 36000 5800 6.21 per square feet Providing utilities 81160 5800 13.99 per square feet

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