Kramer Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools:
(b) 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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rafikiedu08 rafikiedu08 · Answer 1 · 2022-08-29T08:36:07+02:00

The company's predetermined overhead rate, Activity Rate is $22.40 per DLH

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(b) Activity Rate (a ÷ b)

Labor Related $48,000 30,000 DLHs $1.60 per DLH

Machine Related $67,500 10,000 MHs $6.75 per MH

Machine Setups $90,000 600 Setups $150 per Setup

Production Orders $112,000 3,500 Orders $32 per Order

Product Testing $59,400 1,800 Tests $33 per Test

Packaging $76,500 4,500 Packages $17 per Package

General Factory $672,000 30,000 DLHs $22.40 per DLH

Total $1,125,400

Activity Rate = Estimated Overhead Cost / Estimated Activity

Activity Rate of Labor Related = $48,000 / $30,000

= $1.60 per DLH

Activity Rate of Machine Related = $67,500 / 10,000

= $6.75 per MH

Activity Rate of Machine Setups = $90,000 / 600

= $150 per Setup

Activity Rate of Production Orders = $112,000 / 3,500

= $32 per Order

Activity Rate of Product Testing = $59,400 / 1,800

= $33 per Test

Activity Rate of Packaging = $76,500 / 4,500

= $17 per Package

Activity Rate of General Factory = $672,000 / 30,000

= $22.40 per DLH

Learn more about Activity Rate brainly.com/question/5143419

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