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CALCULATOR Expand Your Critical Thinking 17-02 (Part Level Submission) Ideal Manufacturing Company has supported a research and development (R&D) department that has for many years been these contributor to the company's new tam The RAD activity is an overhead cost center that performs service only to in house manufacturing departments (four different productions, all of which produce agricultural/tarm/ranch-related machinery products The department has never sold its services to outside companies. But, because of its long story of success, target manufacturers of agricultural products have noprached to alta hire its RAD department for special projects. Because the costs of operating the RAD department have been spiraling uncontrollably, Ideal's management is madering entertaining these outside approaches to absorb the increasing costs. However, (1) management doesn't have any cont basis for charging RSD Services to outsiders, and it needs to gain control of its R&D costs Management decides to implement an activity based costing system in order to determine the charges for both outuiders and the inhours of the department's services. R&D activities fall into four pools with the following annual costs. Market analysis $1,128,000 Product design 2,124,000 Product development 4,350,000 Prototype testing 1,560,000 Activity analysis determines that the appropriate cost drivers and their usage for the four activities are: Total Activities Cost Drivers Estimated Drivers Market analysis Hours of analysis 14,100 hours Product design Number of designs 2,360 designs Product development Number of products 100 products Prototype testing Number of tests 520 tests (a) ZYour answer has been saved and sent for grading. See Gradebook for score details. Compute the activity based overhead rate for each activity cost pool. Activities Cost Pools Activity-Based Overhead Rates 80 per hour Market analysis Product design 900 per design Product development 43500 per product Prototype testing 3000 per test $ (b) How much cost would be charged to an in-house manufacturing department that consumed 1,970 hours of market analysis time, was provided 290 designs relating to 11 products, and requested 84 engineering tests? Total overhead assigned

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