Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC: Cost Pool Cost Driver Estimated Overhead  Wholesale  Retail Ordering Number of orders $120,000 $180,000 $60,000 Machine setups Number of setups $85,000 $200,000 $140,000 Inspection Number of inspections $75,000 $60,000 $15,000 What would be the predetermined rate for each cost pool? a. Ordering b. Machine setups c. Inspection

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC:

Cost Pool Cost Driver Estimated Overhead  Wholesale  Retail
Ordering Number of orders $120,000 $180,000 $60,000
Machine setups Number of setups $85,000 $200,000 $140,000
Inspection Number of inspections $75,000 $60,000 $15,000

What would be the predetermined rate for each cost pool?

a. Ordering

b. Machine setups

c. Inspection

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