Assume Fine Finishing, Inc., discussed in Problem 41, uses activity-based costing.

Required:

a. Using the data presented at the beginning of Problem 41, calculate the predetermined overhead rate for each activity.

b. The following activity associated with the desk product was reported for the month of March.

Using the predetermined overhead rates calculated in requirement a, determine the amount of overhead applied to the desk product for the month of March.

c. Make the journal entry to record overhead applied to the desk product for the month of March.

d. Assume you are the manager of the desk product line and would like to reduce the amount of overhead costs being applied to your products. Which activity would you focus on first? Why?

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Number of purchase orders processed Number of machine setups Number of machine hours Number of quality inspections 40 22 2,425 890