Question: 1. Baker Manufacturing has three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $90,000, $162,500,

Baker Manufacturing has three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $90,000, $162,500, and $28,000, respectively. The expected annual use in each department is 1,000 setups, 12,500 machine hours, and 875 inspections.

Instructions

Compute the overhead rate for each activity.

2nd problem

Randel Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information is presented below:

					Cost Drivers by Product
Activity Cost Pool	Cost Driver		Est. Overhead		Budget		Deluxe
Ordering/ Receiving	Orders	$ 130,000		600		400
Machine Setup	Setups	297,000		500		400
Machining	Machine hours	1,000,000		150,000		100,000
Assembly	Parts	1,600,000		1,200,000		800,000
Inspection	Inspections	300,000		550		450

Instructions

Compute the overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe. Round your answer to the nearest cent.

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