Question: Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the
| Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the companys five activity cost pools: |
| Activity Cost Pool | Activity Measure | Expected Overhead Cost | Expected Activity | ||
| Labor-related | Direct labor-hours | $ | 19,120 | 2,390 | DLHs |
| Purchase orders | Number of orders | $ | 1,575 | 525 | orders |
| Product testing | Number of tests | $ | 2,430 | 270 | tests |
| Template etching | Number of templates | $ | 800 | 40 | templates |
| General factory | Machine-hours | $ | 46,500 | 7,750 | MHs |
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Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Expected Overhead Expected Activity Activity Cost Poo Activity Measure Cost Labor-related 19120 Direct labor hours 2.390 DLHs 1,575 Purchase orders Number of orders 525 orders 2,430 Product testing Number of tests 270 tests Template etching Number of templates 800 40 templates 46,500 7750 MHs General factory Machine-hours 375 points Required 1. Compute the activity rate for each of the activity cost pools Activity Cost Activity Rate OO per DLH Labor-related Purchase orders per order Product testing per test Template etching per template per MH General factory
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