1 E5-26 Fontillas Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During (S...

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E5-26 Fontillas Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During (S April, it produced 50 range instruments and 300 pressure gauges and incurred estimated overhead costs of $94,500. An C analysis of estimated overhead costs reveals the following activities: ra Activities 1. Materials handling 2. Machine set-ups 3. Quality inspections Cost Drivers Number of requisitions Number of set-ups Number of inspections Total Cost $40,000 27,500 27,000 $94,500 The cost driver volume for each product was as follows: Cost Drivers Instruments Gauges Total Number of requisitions Number of set-ups Number of inspections 1,000 450 Soo 600 400 600 200 300 200 400 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 Fontillas Instrument explaining the benefits of activity-based costing. E5-26 Fontillas Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During (S April, it produced 50 range instruments and 300 pressure gauges and incurred estimated overhead costs of $94,500. An C analysis of estimated overhead costs reveals the following activities: ra Activities 1. Materials handling 2. Machine set-ups 3. Quality inspections Cost Drivers Number of requisitions Number of set-ups Number of inspections Total Cost $40,000 27,500 27,000 $94,500 The cost driver volume for each product was as follows: Cost Drivers Instruments Gauges Total Number of requisitions Number of set-ups Number of inspections 1,000 450 Soo 600 400 600 200 300 200 400 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 Fontillas Instrument explaining the benefits of activity-based costing.

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a Determination of overhead rate of each activity Activity Total overhead Cost d... View the full answer