AProblem
(Part Level Submission) Major Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 68 range instruments and 408 pressure gauges were produced, and overhead costs of $102,090 were estimated. An analysis of estimated overhead costs reveals the following activities.
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Activities
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Cost Drivers
|
Total Cost
|
|
1. Materials handling
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Number of requisitions
|
$50,400
|
|
2. Machine setups
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Number of setups
|
23,600
|
|
3. Quality inspections
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Number of inspections
|
28,090
|
|
|
$102,090
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The cost driver volume for each product was as follows.
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Cost Drivers
|
Instruments
|
Gauges
|
Total
|
|
Number of requisitions
|
480
|
570
|
1,050
|
|
Number of setups
|
150
|
250
|
400
|
|
Number of inspections
|
150
|
380
|
530
|
(a) Determine the overhead rate for each activity.