Weisman, Inc. uses activity-based costing as the basis for information to set pr

Question

Weisman, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats.

Activity Cost Pools

Estimated
Overhead

Expected Use of
Cost Drivers per Activity

Compute the activity-based overhead rates using the following budgeted data for each of the activity cost pools. (Round answers to 2 decimal places, e.g. 12.25.)

Activity-based overhead rates

Activity Cost Pools

Estimated
Overhead

Expected Use of
Cost Drivers per Activity

Designing $432,000 12,900 designer hours Sizing and cutting 4,230,000 162,000 machine hours Stitching and trimming 1,400,000 83,000 labor hours Wrapping and packing 317,000 35,000 finished units

Explanation / Answer

Activity Cost Pools Estimated Expected Use of Overhead Cost Drivers per Activity rate per cost driver unit Designing $432,000 12,900 designer hours $33.49 Sizing and cutting 4,230,000 162,000 machine hours $26.11 Stitching and trimming 1,400,000 83,000 labor hours $16.87 Wrapping and packing 317,000 35,000 finished units $9.06

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