EXERCISE 8-21 (CONTINUED)

2. Overhead rates by activity are computed below:

(a)

Estimated

(a) ÷ (b)

Overhead

Predetermined

Activity Cost Pool

Cost (b)

Expected Activity

Overhead Rate

Purchasing ... $204,000 600 purchase orders $340 per purchase order

Processing... $182,000 35,000 machine-hours $5.20 per machine-hour

Scrap/rework... $379,000 2,000 orders $189.50 per order

Shipping... $135,000 900 shipments $150 per shipment

Problem 8-22 (continued)