Sorce Instrument, Inc. manufactures two products: missile range

Sorce Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 300 pressure gauges were produced, and overhead costs of $89,500 were estimated. An analysis of estimated overhead costs reveals the following activities.

Sorce Instrument, Inc. manufactures two products: missile range

The cost driver volume for each product was as follows.

Sorce Instrument, Inc. manufactures two products: missile range

Instructions
(a) Determine the overhead rate for each activity.
(b) Assign the manufacturing overhead costs for April to the two products using activity-based costing.
(c) Write a memorandum to the president of Sorce Instrument explaining the benefits of activity-basedcosting.

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