Miramar Industries manufactures two products, A and B. The manufacturing operation involves three overhead activities - production setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities:

Activity	Cost	Activity Base
Production Setup	$250,000	Number of setups
Material Handling	$150,000	Number of parts
General Overhead	$80,000	Number of direct labor hours

Each product’s total activity in each of the three areas are as follows:

	Product A	Product B
Number of setups	100	300
Number of parts	40,000	20,000
Number of direct labor hours	9,000	12,000

What is the activity rate for General Overhead?

$4.00 per direct labor hour

$3.81 per direct labor hour

$6.71 per direct labor hour

$4.20 per direct labor hour

Answer rating: 100% (QA)

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