Question

Given the following information, determine the activity rate for setups.

Activity Pool Activity Base Budgeted Amount
Setups 10,000 $180,000
Inspections 24,000 $120,000
Assembly (DLH) 80,000 $400,000

a. $58.00
b. $0.75
c. $5.09
d. $18

Answer 1

Set up= $18 per set up

Step-by-step explanation:

Giving the following information:

Activity Pool Activity Base Budgeted Amount

Setups 10,000 $180,000

To calculate the activity rate, we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Set up= 180,000 / 10,000

Set up= $18 per set up