Shambu Shoes is in the business of manufacturing basketball shoes. Accordingly the company uses the six activity cost pools listed below:
Activity Cost Pool Activity Measure
Maintenance Machine Hours
Setups Setup Hours
Cutting Supervision Setup Hours
Cutting Depreciation Machine Hours
Assembly supervision Direct Labor hours
Assembly Depreciation Machine Hours
The company has already carried out its first stage allocations of costs. The company's annual costs and activities are summarized as follows:
Activity Cost Pool Estimated Overhead Cost Expected Activity
Maintenance $150,000 50,000 Machine hours
Setups $450,000 300 setup hours
Cutting Supervision $270,000 300 setup hours
Cutting Depreciation $160,000 80,000 Machine Hours
Assembly Supervision $160,000 32,000 Direct Labor hrs
Assembly Depreciation $20,000 80,000 Machine Hours
Compute the activity rate for each of the activity cost pools: