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Exercise 5-6B Computing overhead rates based on different costing drivers Rankin Industries produces two surge...

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Exercise 5-6B Computing overhead rates based on different costing drivers Rankin Industries produces two surge protectors: K2761 with six outlets and D3354 with eight outlets and two telephone line connections. Because of these product differences, the company plans to use activity-based costing to allocate overhead costs. The company has identified four activity pools. Relevant information follows: Activity Pools Cost Pool Total Cost Driver Machine setup Machine operation Quality control Packaging Total overhead cost $180,000 450,000 72,000 48,000 Number of setups Number of machine hours Number of inspections Number of units Expected activity for each product follows: Number of Machine Hours 1.400 2,600 4,000 Number of Units 25,000 15,000 40,000 Number of Setups Number of Inspections K2761 D3354 Total 48 72 120 78 172 Required a. Compute the overhead rate for each activity pool. b. Determine the overhead cost allocated to each product

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