Required information
Exercise 4-2 (Algo) Compute Activity Rates [LO4-2]
[The following information applies to the questions displayed below.]
Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has
the following seven activity cost pools:
Activity Cost Pool
Labor-related
Machine-related
Machine setups
Production orders
Product testing
Packaging
General factory
Estimated
Overhead Cost
$ 28,000
$ 2,500
$ 34,300
$ 13,800
$ 12,000
$ 57,000
$ 60,000
Expected Activity
5,000 direct labor-hours
5,800 machine-hours
788 setups
388 orders
600 tests
3,800 packages
5,000 direct labor-hours
Exercise 4-2 Part 2 (Algo)
2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined
overhead rate based on direct labor-hours.
Note: Round your answer to 2 decimal places.
Predetermined overhead rate
per DLH