Question

Fellar Corp. has identified the following information:   

Activity cost pools
Materials handling	$39,200
Machine maintenance	32,560
Cost drivers
Number of material moves	700
Number of machine hours	74,000

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



2. Determine the amount of overhead assigned to Fellar’s products if they have the following activity demands: (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

	Product A	Product B
Number of material moves	560	140
Number of machine hours	42,900	31,100

Answer 1

Statement showing computations
Particulars	Amount a	Activity Driver	No of Activity b	Cost per activity c= a/b	No of Activity of Product A d	Cost Allocated to Product A c*d	No of Activity of Product B e	Cost Allocated to Product B c*e
Material Handling	39,200.00	No of material Moves	700.00	56.00	560.00	31,360.00	140.00	7,840.00
Machine Maintenance	32,560.00	No of Machine hours	74,000.00	0.44	42,900.00	18,876.00	31,100.00	13,684.00
Total Overhead	71,760.00					50,236.00		21,524.00
a)
Activity	Activity Rate
Material Handling	56.00
Machine Maintenance	0.44
b)
Overhead assigned to product A	50,236.00
Overhead assigned to product B	21,524.00
	71,760.00