Weisman, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats.
Activity Cost Pools Estimated Overhead Estimated Use of Cost
Drivers per Activity Designing $443,260 14,800 designer hours
Sizing and cutting 3,960,600 164,000 machine hours
Stitching and trimming 1,418,100 81,500 labor hours
Wrapping and packing 330,750 31,500 finished units

Compute the activity-based overhead rates using the following budgeted data for each of the activity cost pools. (Round answers to 2 decimal places, e. g. 12.25.)

Activity-based overhead rates
Designing $ per designer hour
Sizing and cutting $ per machine hour
Stitching and trimming $ per labor hour
Wrapping and packing $ per finished unit

Designing $ per designer hour

= 443,260/14,800= $29.95 per hour

Sizing and cutting $ per machine hour

=3,960,600/164,000 = $24.15 per hour

Stitching and trimming $ per labor hour

=1,418,100/ 81,500 =  $17.5 per labor hour

Wrapping and packing $ per finished unit=330,750/ 31,500= $10.5 per finished unit

Explanation:

Working

Activity Cost  Estimated Overhead  Estimated Use    Drivers per Activity

Pools                                                           of Cost

Designing             $443,260                14,800                 designer hours

Sizing and cutting   3,960,600             164,000                machine hours

Stitching and trimming 1,418,100            81,500                   labor hours

Wrapping and packing 330,750              31,500                finished units

Activity-based overhead rates

Designing $ per designer hour

= 443,260/14,800= $ 29.95 per hour

Sizing and cutting $ per machine hour

=3,960,600/164,000 = $ 24.15 per hour

Stitching and trimming $ per labor hour

=1,418,100/ 81,500 =  $ 17.5 per labor hour

Wrapping and packing $ per finished unit=330,750/ 31,500= $ 10.5 per finished unit

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