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Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable...

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Accounting

Gable Company uses three activity cost pools. Each pool has acost driver. Information for Gable Company follows:

Activity Cost PoolsTotal Cost of PoolCost DriverEstimated Cost Driver
Machining$259,000Number of machine hours85,600
Designing costs59,000Number of design hours7,800
Setup costs72,000Number of batches370


Required:
1. Compute the activity rate for each activity.(Round your answers to 2 decimal places.)

ActivityActivity Rate
Machiningper Machine Hrs
Design Costsper Design Hrs
Setupper Batch



2. Classify each activity as facility, product,batch, or unit level.

Machining  
Design
Setup

Answer & Explanation Solved by verified expert
4.3 Ratings (803 Votes)

  • Requirement 1

Activity

Activity Rate

Machining

$               3.03

per Machine Hrs

Design Costs

$               7.56

per Design Hrs

Setup

$            194.59

per Batch

--Working

Activity Cost Pools

Total Cost of Pool

Cost Driver

Estimated Cost Driver

Activity Rate

[A]

[B]

[C = A/B]

Machining

$259,000

Number of machine hours

85600

$                    3.03

Designing costs

$59,000

Number of design hours

7800

$                    7.56

Setup costs

$72,000

Number of batches

370

$               194.59

  • Requirement 2

Machining

  Unit Level

Design

Product Level

Setup

Batch Level

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