Question: Zapato Company produces two types of boots: cowboy and cowgirl. There are four activities associated with the two products. Drivers for the four activities are as follows:
Cowboy Cowgirl
Cutting hours 2,100 3,900
Assembly hours 1,500 2,250
Inspection hours 675 1,575
Rework hours 75 225
Activity Rates: Refer to the information for Zapato Company above. The following activity data have been collected:
Cutting $60,000
Assembling 75,000
Inspecting 18,000
Reworking 9,000
Required: Calculate the activity rates that would be used to assign costs to each product.