Brooklyn Cycles produces custom bicycles and has used a traditional manufacturing overhead application rate based on direct labor hours. Currently, overhead is applied at the rate of $26/DLH. Brooklyn is now considering using activity based driver rates to improve manufacturing overhead costing accuracy.
Budgeted manufacturing overhead costs for expected driver activity are:
![1744_262-B-A-F-R (1198).png](https://secure.tutorsglobe.com/CMSImages/1744_262-B-A-F-R (1198).png)
Required:
Calculate manufacturing overhead rates that would be applied to bicycles produced using activity based costing, and explain how Brooklyn Cycles could achieve improved costing accuracy.