Trek Cycle Company uses three activity pools to apply overhead to its products.

Each activity has a cost driver used to allocate the overhead costs to the product. The activities and related overhead costs are as follows: Product design $50,000; Machining $300,000; and Material handling $100,000. The cost drivers and expected use are as follows.

(a) Compute the predetermined overhead rate for each activity.
(b) Classify each of these activities as unit-level, batch-level, product-level, orfacility-level.

Expected Use of Cost Drivers per Activity Activities Cost Drivers Product design Machining Material handling Number of product changes Machine hours Number of set ups 10 150,000 100