# ACC560 Case 2 ANSWERS - Week 3 Case 2 Greetings Inc...

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per activity by the number of cost drivers expected to be used per activity. The formula for the activity-based overhead rate is: Estimated Overhead per Activity ÷ Expected Use of Cost Drivers per Activity = Activity-Based Overhead Rate Compute the activity-based overhead rates for each of the four activities. Activity Cost Pools Estimated Overhead ÷ Expected Use Of Cost Drivers by = Activity Activity-Based Overhead Rates Picking prints \$30,600 102,000 prints \$0.30 per print Inventory selection and management \$91,700 131,000 components \$0.70 per component Website optimization Unframed: \$25,800 Framed: \$103,200 Unframed: 100,000 print capacity Framed: 25,000 print capacity Unframed: \$0.258 per print Framed: \$4.128 per print Framing and matting cost \$123,900 59,000 components at capacity \$2.10 per component Thus, the activity-based overhead rates are as follows. a. Picking prints is \$0.30 per print, b. Inventory selection and management is \$0.70 per component, c. Website optimization (unframed print) is \$0.258 per print capacity, and website optimization (framed print) is \$4.128 per print capacity, d. Framing and matting is \$2.10 per component capacity. 3. Answer
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## This note was uploaded on 11/15/2011 for the course ACCOUNING ACC560 taught by Professor Loriperez during the Spring '11 term at Strayer.

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ACC560 Case 2 ANSWERS - Week 3 Case 2 Greetings Inc...

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