Patten Company uses activity-based costing (ABC). Patten manufactures toy cars using two activities: plastic injection molding and decal application. Patten's 2015 total budgeted overhead costs for these two activities are $675,000 (80% for injection molding and 20% for decal application). Molding overhead costs are driven by the number of pounds of plastic that are molded together. Decal application overhead costs are driven by the number of decals applied to toys. The budgeted activity data for 2015 are as follows:
Pounds of plastic molded ............3,000,000
Number of decals applied ...............375,000
Required:
1. Calculate the activity rate for the plastic injection molding activity (round to two decimal places).
2. Calculate the activity rate for the decal application activity (round to two decimal places).