East Horizon uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead​ costs: materials​ handling, machine​ setup, insertion of​ parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as​ follows:
Activity Total Budgeted Manufacturing Allocation Base
Overhead Cost
Materials handling $13,200 Number of parts
Machine setup 5,200 Number of setups
Insertion of parts 49,500 Number of parts
Finishing 86,100 Finishing direct labor hours
Total $154,000
East Horizon expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 2,750 ​parts, require 15 ​setups, and consume 1,700 hours of finishing time.
Job 420 used 300 ​parts, required 2 ​setups, and consumed 140 finishing hours.
Job 510 used 475 ​parts, required 4 ​setups, and consumed 330 finishing hours.
Requirement:
Compute the cost allocation rate for each activity. First, identify the formula. then compute the rate for each activity.