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Question - Two of the activity cost pools for Molina Company are (a) machining ($325,000) and (b) inspections ($42,000). Possible cost drivers are direct labor hours (2,550), machine hours (12,500), square footage (2,000), and number of inspections (200).
Compute the overhead rate for each activity.
Overhead Rate
Machining
Inspections
Be sure to indicate specific ways in which the audit firm should tailor its approach based on the factors you identify.
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