Palmer Co produces two types of volleyballs: Volleylite and Official Game.
Both products pass through two producing departments. The Official Game production is much
more labourintensive than the Volleylite. The Volleylite is also more popular. The following
data have been gathered for the two products:
Product Data
Official Game Volleylite
Units produced per year
Machine hours
Packing orders
Palmer Co has decided to used activitybased costing and has developed two types of activities,
machine related based on machine hours and other overhead based on packing orders
Machinerelated costs equal $ Other overhead costs equal $
Required:
Calculate the activity rate for machinerelated costs based on machine hours.
Calculate the activity rate for other overhead costs based on packing orders.
Using the two activity rates, calculate the overhead cost per unit for Official Game.
Using the two activity rates, calculate the overhead cost per unit for Volleylite.
