Exercise $5-68$ Computing overhead rates based on different costing drivers

Rankin Industries produces two surge protectors: K$2761$ with six outlets and D$3354$ with eight outlets

and two telephone line connections. Because of these product differences, the company plans to use

activity$-$based costing to allocate overhead costs. The company has identified four activity pools. Rele$-$

vant information follows.

Expected activity for each product follows.

Required

a$.$ Compute the overhead rate for each activity pool.

b$.$ Determine the overhead cost allocated to each product.