Sorce Instrument, Inc.

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Sorce Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and

300

pressure gauges were produced, and overhead costs of $89,

500

were estimated. An analysis of estimated overhead costs reveals the following activities.

 

Cost

 

 

 

 

 

 

     

 

Activity		Cost Driver		Total
1. Materials handling		Number of requisitions	$35,000
2. Machine setups		Number of setups	27,500
3. Quality inspections		Number of inspections	27,000
$89,500

The cost driver volume for each product was as follows.

  Cost Driver

Total

  Number of requisitions

 

 

 

  Number of setups

  300  

 

  Number of inspections 200   400   600   

Instruments	Gauges
	400		600	1,000
	200	500