Dolan Tires manufactures tires for dune buggies and has two different products, nubby tires and smooth tires. The company produces 5,000 nubby tires and 10,000 smooth tires each year and incurs $167,000 of overhead costs. The following information is available:

For the nubby tires, the company has 400 requisitions, 200 setups, and 200 inspections. The smooth tires require 600 requisitions, 300 setups, and 400 inspections.

Instructions:
Determine the overhead rate for eachactivity.

Transcribed Image Text:

Cost Driver Activitt Materials handling Machine setups Quality inspections Total Cost S60,000 50,000 57,000 Number of requisitions Number of setups Number of inspections