Sukhu Corporation\'s activity-based costing system has three activity cost pools

Question

Sukhu Corporation's activity-based costing system has three activity cost pools--Fabricating, Setting Up, and Other. The company's overhead costs have already been allocated to these cost pools as follows:

Costs in the Fabricating cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. The following table shows the machine-hours and number of batches associated with each of the company's two products:

Required:

Calculate activity rates for each activity cost pool using activity-based costing. (Round your answers to 2 decimal places.)

Explanation / Answer

Activity cost pools Activity rate Fabricating 0.79 per MH =9800/12400 Setting up 14.50 per batch =31900/2200

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