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 for next year follows Activity Purchasing Cleaning factory Providing utilities Expected Cost Cost Driver Purchase orders Square feet Square feet Expected Usage of Cost Driver 5,000 purchase orders 5,500 square feet 5,500 square feet $175,000 34,500 74,950 Compute activity rates for each of the cost pools. (Round your answers to 2 decimal places.) Expected Costs Expected Amount of Cost Driver Activity Overhead Rate Activity cost pool Purchasing Factory 5,000 per purchase order 5,500 per square foot

Explanation / Answer

Activity cost Pool Expected Costs Expected Amount of Cost Driver Activity Overhead Rate Purchasing 175,000 175,000 5000 35 per purchase order Factory 34,500+74,950 109450 5500 19.9 per square foot

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