Buggy Company manufactures and sells two products: Product A1 and Product A2. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: EstimatedExpected ActivityActivity Cost PoolsActivity MeasuresOverhead CostProduct A1Product A2TotalLabour-relatedDLHs$250,0005,0004,0009,000Machine setupssetups138,0408006001,400General factoryMHs280,5533,5003,2006,700Total 668,593 What is the activity rate for the Machine Setups activity cost pool?

Activity rate= Specific Overhead/ Estimated cost driver activity

Answered: activity rate for the Machine Setups…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 5CE: Roberts Company produces two weed eaters: basic and advanced. The company has four activities:...

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Buggy Company manufactures and sells two products: Product A1 and Product A2. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

		Estimated	Expected Activity
Activity Cost Pools	Activity Measures	Overhead Cost	Product A1	Product A2	Total
Labour-related	DLHs	$250,000	5,000	4,000	9,000
Machine setups	setups	138,040	800	600	1,400
General factory	MHs	280,553	3,500	3,200	6,700
Total		668,593

What is the activity rate for the Machine Setups activity cost pool?

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