Rustafson Corporation is a diversified manufacturer of consumer goods. The compa

Question

Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Estimated Expected Activity Activity Cost Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory overhead Cost $ 22,000 1, 000 direct labor-hours 10,000 8, 000 machine-hours $ 36,000 $ 29,400 $ 27,900 800 setups 600 orders 900 tests 68,400 3,600 packages $ 56,800 ,000 direct labor-hours Exercise 4-2 Part 1 Required: 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Pool Rate per DLH per MH per setup per order per test per package per DLH related Machine setups Production orders teshing factory

Explanation / Answer

Exercise 4-2 STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL Activity Total Expected Activity ACTIVITY COST POOL Measures Overheads Activity Rate Labor related DLH 22,000 1,000 22 per DLH Machine related MH 10,000 8,000 1.25 Per MH Machine setups Setups 36,000 800 45.00 Per Setups Production orders Orders 29,400 600 49.00 Per Orders Product testing tests 27,900 900 31.00 Per tests Packaging packages 68,400 3,600 19.00 Per packages General factory DLH 56,800 1,000 56.80 Per DLH Exercise 4-2 Prt2 OH rate based on DLH Total estimated OH 250500 Divide: Total estimated DLH 1000 OH rate per DLH 250.5

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