A manufacturer uses activity-based costing to assign overhead costs to products. Budgeted cost information for selected activities for next year follows. Activity Purchasing Cleaning factory Providing utilities Activity cost pool Purchasing Factory Expected Cost $127,600 31,500 63,070 Expected Costs Compute activity rates for each of the cost pools. (Round your answers to 2 decimal places.) Expected Amount of Cost Driver Cost Driver Purchase orders Square feet Square feet 4,400 4,900 Activity Overhead Rate Expected Usage of Cost Driver 4,400 purchase orders 4,900 square feet 4,900 square feet per purchase order per square foot

Managerial Accounting: The Cornerstone of Business Decision-Making
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 61P: Method of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a...
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A manufacturer uses activity-based costing to assign overhead costs to products. Budgeted cost information for
selected activities for next year follows.
Activity
Purchasing
Cleaning factory
Providing utilities
Activity cost pool
Purchasing
Factory
Expected Cost
$127,600
31,500
63,070
Expected
Costs
Compute activity rates for each of the cost pools. (Round your answers to 2 decimal places.)
Expected
Amount of
Cost Driver
Cost Driver
Purchase orders
Square feet
Square feet
4,400
4,900
Activity Overhead Rate
Expected Usage of Cost Driver
4,488 purchase orders
4,900 square feet
4,900 square feet
per purchase order
per square foot
Transcribed Image Text:A manufacturer uses activity-based costing to assign overhead costs to products. Budgeted cost information for selected activities for next year follows. Activity Purchasing Cleaning factory Providing utilities Activity cost pool Purchasing Factory Expected Cost $127,600 31,500 63,070 Expected Costs Compute activity rates for each of the cost pools. (Round your answers to 2 decimal places.) Expected Amount of Cost Driver Cost Driver Purchase orders Square feet Square feet 4,400 4,900 Activity Overhead Rate Expected Usage of Cost Driver 4,488 purchase orders 4,900 square feet 4,900 square feet per purchase order per square foot
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