Exercise 4-9 Air United, Inc. manufactures two products: missile range instrumen

Question

Exercise 4-9 Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 52 range instruments and 296 pressure gauges were produced, and overhead costs of $96,520 were estimated. An analysis of estimated overhead costs reveals the following activities Activities Cost Drivers Total Cost 1 Materials handling 2. Machine setups 3. Quality inspections Number of requisitions Number of setups Number of inspections $41,000 29,795 25,725 $96,520 The cost driver volume for each product was as follows Cost Drivers Instruments Gauges Total Number of requisitions Number of setups Number of inspections 375 175 240 650 1,025 330 285 505 525 Determine the overhead rate for each activity Overhead Rate Materials handling Machine setups Quality inspections

Explanation / Answer

Answer

determine the overhead rate

overhead cost assigned and overhead cost per unit ;

particulars Overhead rate Material handling 40 Machine setup 59 Quality inspection 49

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