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Chipman Inc. produces water pumps. Overhead costs have been identified as follows: Activity Pool Material handling Machine ma

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Answer #1

A) Activity Rate:

Activity Pool Activity Rate
Material Handling $ 157.50 per moves
Machine Maintenance $3 per machine hour
Setups $ 1234 per set up

Explanation:

1) Material Handling:

= $ 66,150 ÷ 420 = $ 157.50 per moves

2) Machine Maintenance:

= $ 111,600 ÷ 37,200

= $ 3 per machine hour

3) Setups:

= $ 81,444 ÷ 66

= $ 1234 per set up

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