Determine the activity rate for the setup activity

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Reference no: EM132576583

The total factory overhead for Norton Company is budgeted for the year at $300,000, divided into three activities: assembly, $200,000; setup, $50,000; and materials handling, $150,000. Norton manufactures two products: Product A and Product B. The activity-based usage quantities for each product by each activity are estimated as follows:

Assembly                                           Setup                        Materials                   Handling

Product A                                        5,000 dlh                       60 setups                 25 moves

Product B                                       15,000 dlh                     110 setups                250 moves

Total activity-base usage                   20,000 dlh                  170 setups               275 moves

Question 1: Determine the activity rate for the setup activity (round to nearest dollar).

a. $294 per setup

b. $166 per setup

c. $118 per setup

d. $1,764 per setup

Reference no: EM132576583

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