Hernandez Company Has the Following Activities in Its Manufacturing Process

Essay

Hernandez Company has the following activities in its manufacturing process:
$$\begin{array} { | l | l | l | l | } \hline \text { Activity } & \text { Annual Overhead Cost } & \text { Expected Annual Use } & \text { Overhead Rate } \\ \hline \text { Materials handling } & \$ 60,000 & 600 \text { purchase orders } & \\\hline \text { Machine set-ups } & \$ 15,000 & 60 \text { batches } & \\\hline \text { Product testing } & \$ 28,000 & 375 \text { tests } & \\\hline\end{array}$$ Calculate the overhead rate for each activity.