Determine the overhead rate for each activity

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Question

Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 200 pressure gauges were produced, and overhead costs of $85,890 were estimated. An analysis of estimated overhead costs reveals the following activities.

Activities Cost Drivers Total Cost

1.Materials handlingNumber of requisitions$37,620

2.Machine setupsNumber of setups26,950

3.Quality inspectionsNumber of inspections21,320

$85,890

The cost driver volume for each product was as follows.

Cost Drivers

Instruments

Gauges

Total

Number of requisitions3856601,045Number of setups175315490Number of inspections275245520

Determine the overhead rate for each activity.

Reference no: EM132381096

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