Fontillas Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April,...
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Fontillas Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, it produced 50 range instruments and 200 pressure gauges and incurred estimated overhead costs of $94,540. An analysis of estimated overhead costs reveals the following activities: Activities Cost Drivers Total Cost 1. Material handling Number of requisitions $33,600 2. Machine set-ups Number of set-ups 28,000 3. Quality inspections Number of inspections 32,940 $94,540 The cost driver volume for each product was as follows: Cost Drivers Instruments Gauges Total Number of requisitions 420 630 1,050 Number of set-ups 180 320 500 Number of inspections 210 400 610 Determine the overhead rate for each activity. The overhead rates are: Activity Cost Pool Rate Material handling per requisition $ per set-up Machine set-ups Inspections per inspection $ LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR EXERCISE Assign the manufacturing overhead costs for April to the two products using activity-based costing. Instruments Gauges Overhead cost per unit
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