Frederick, Inc. uses activity-based costing to account for its chrome bumper manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the year and their allocation bases are as follows:

Data table

Activity	Total Budgeted Cost	Allocation Base
Materials handling	$8,000	Number of parts
Machine setup	4,200	Number of setups
Insertion of parts	54,000	Number of parts
Finishing	66,000	Finishing direct labor hours
Total	$132,200

Frederick expects to produce 500 chrome bumpers during the year. The bumpers are expected to use 1,000 parts, require 10 setups, and consume 1,200 hours of finishing time.

Requirements

1.	Compute the predetermined overhead allocation rate for each activity.
2.	Job 86 required the production of 150 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86.

Question content area bottom

Part 1

Requirement 1. Compute the predetermined overhead allocation rate for each activity.

Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Round your answers to the nearest cent.)

						Predetermined OH
					=	allocation rate