Question

Two Step Dance manufactures all types of shoes for the avid dancer, like ballet slippers and tap shoes. Two Step Dance uses the activity based costing method to allocate manufacturing overhead to its products. Below is a table summarizing the Estimated MOH costs and their respective drivers. Using this information, what is the MOH Rate for the Inspecting activity? Round your answer to the nearest penny (i.e. x.xx).

Activity	Estimated MOH	Estimated Basis
Purchasing	$20,000	2,500 purchase orders
Assembling	$75,000	60,000 DL hours
Packaging	$35,000	5,000 units
Inspecting	$10,000	2,000 batches

Answer 1

For inspecting Activity

Estimated manufacturing overhead = $10,000

Estimated number of Batches = 2,000

Activity rate = Estimated manufacturing overhead / Estimated number of Batches

= 10,000/2,000

= $5 per batch

The MOH Rate for the Inspecting activity = $5 per batch

Kindly comment if you need further assistance. Thanks‼!