Spud, Inc., a manufacturer of gourmet snacks, employs activity-based costing. The budgeted data for each of the activity cost pools is provided below for the year 2022.

Expert Solution

Computation of activity rates:

Activity rates are computed by dividing the estimated costs of each cost pools by the volume of the related activity driver.

Activity cost pools	Estimated Overhead	Driver usage		Overhead rates
Ordering and receiving	$ 84,000.00	12000	Orders	$ 7.00	Per order
Food processing	$ 480,000.00	60000	Machine hours	$ 7.00	Per order
Packaging	$ 1,760,000.00	40000	Labor hours	$ 44.00	Per labor hour

Junaid answered 2 years ago

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