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ActivityCost DriverTotal Cost1.Materials handlingNumber of requisitionsP30,0002.Machine setupsNumber of setups24,0003.Quality inspectionsNumber of inspections27,000 The cost drive volume of eachproduct was as follows: Cost driverProduct TTProduct SSNumber

ActivityCost DriverTotal Cost1.Materials handlingNumber of requisitionsP30,0002.Machine setupsNumber of setups24,0003.Quality inspectionsNumber of inspections27,000

The cost drive volume of eachproduct was as follows:

Cost driverProduct TTProduct SSNumber of requisitions400600Number of setups150300Number of inspections200400

Required:

  1. Determine the overhead rate for each activity.
  2. Allocate the manufacturing overhead costs to the two products using ABC.

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