Activity Rates
Pratt Company uses activity-based costing (ABC). Pratt manufactures outdoor water toys using two activities: plastic injection molding and decal application. Pratt's 2013 total budgeted overhead costs for these two activities are $436,000 (70% for injection molding and 30% for decal application). Molding overhead costs are driven by the number of pounds of plastic that are molded together. Decal application overhead costs are driven by the number of decals applied to toys. The budgeted activity data for 2013 are as follows:
| Pounds of plastic molded |
2,070,000 |
| Number of decals applied |
181,000 |
Required:
1. Calculate the activity rate for the plastic injection molding activity. Round your answer to the nearest cent. $ per pound molded
2. Calculate the activity rate for the decal application activity. Round your answer to the nearest cent. $ per decal applied