Problemrustafson corporation is a diversified manufacturer, Ask an Expert

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Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Activity Cost Pool

Estimated Overhead vs. Cost Expected Activity

Labor-related $ 28,000 2,000 direct labor-hours

Machine-related $ 5,000 10,000 machine-hours

Machine setups $ 45,000 1,000 setups

Production orders $ 30,000 600 orders

Product testing $ 27,200 800 tests

Packaging $ 64,600 3,800 packages

General factory $ 51,200 2,000 direct labor-hours

Required: 1. Compute the activity rate for each activity cost pool.

Labor-related

Machine-related

Machine setups

Production orders

Product testing

Packaging

General factory

2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92809809

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