Sorce Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 300 pressure gauges were produced, and overhead costs of $

Sorce Instrument, Inc. manufactures two products: missile range instruments

and space pressure gauges. During April, 50 range instruments and 300 pressure gauges

were produced, and overhead costs of $89,500 were estimated. An analysis of estimated

overhead costs reveals the following activities.

            Activities                                              Cost Drivers                       Total Cost

1.Materials handling                                         Number of requisitions               $35,000

2. Machine setups                                             Number of setups                         27,500

3. Quality inspections                                       Number of inspections                 27,000

     Total                                                                                                                       $89,500

The cost driver volume for each product was as follows:

Cost Drivers                                                      Instruments                         Gauges                 Total

Number of requisitions                                         400                                      600                   1,000

Number of setups                                                  200                                      300                     500

Number of inspections                                          200                                      400                     600

Instructions  :

(a) Determine the overhead rate for each activity.

(b) Assign the manufacturing overhead costs for April to the two products using activity based costing