Exercise $5-6$A $($Algo$)$ Computing overhead rates based on different cost drivers LO $5-2,5-3$

Adams Industries produces two electronic decoders, P and Q$.$ Decoder P is more sophisticated and requires more programming and testing than does Decoder Q$.$ Because of these product differences, the company wants to use activity$-$based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows:

Activity PoolsCost Pool TotalCost DriverRepair and maintenance on assembly machine$ $96,900$Number of units producedProgramming cost$108,680$Number of programming hoursSoftware inspections$6,670$Number of inspectionsProduct testing$7,020$Number of testsTotal overhead cost$ $219,270$

Expected activity for each product follows:

$$Number of UnitsNumber of Programming HoursNumber of InspectionsNumber of TestsDecoder P$22,0002,4001991,500$Decoder Q$35,0002,000911,100$Total$57,0004,4002902,600$

Required

Compute the overhead rate for each activity pool.

Determine the overhead cost allocated to each product.