Santry Industries manufactures a variety of custom products. The company has traditionally used a
plantwide manufacturing overhead rate based on machine hours to allocate manufacturing overhead
to its products. The company estimates that it will incur $990,000 in total manufacturing overhead
costs in the upcoming year and will use 15,000 machine hours.
Requirement 2. Calculate the cost of Job 351 using activity-based costing.
Begin by calculating the allocation rate for each activity. First determine the formula to compute the allocation rate in an activity-based costing system, then compute the rate for each activity.
(Abbreviations used: est. = estimated, MH-machine hours, Mach-Machine, Eng. Engineering)
Ac