Jerash Manufacturing Company has presented the following budgeted costs information for the year 2020 regarding Product A: (FISRT PICTURE )

Prior to 2019, the company has relied on traditional allocation base using only labor hours as a predetermined manufacturing overhead rate. Sensing that this system was distorting manufacturing overhead costs. In 2020, the company has decided to switch to an activity-based costing system using four activity cost pools to allocate manufacturing overhead costs. Information on these activity cost pools are as follows: (SECOND PICTURE )

Required:

1.Determine the activity rates for overhead costs the company should use in 2020.

Transcribed Image Text:

Direct materials costs Direct labor costs Manufacturing overhead costs Administrative and selling overhead costs Production JOD 840,000 JOD 200,000 JOD 610,000 JOD 300,000 600,000 units Direct materials costs Direct labor costs Manufacturing overhead costs Administrative and selling overhead costs Production JOD 840,000 JOD 200,000 JOD 610,000 JOD 300,000 600,000 units