Tidwell industries has the following overhead costs and cost drivers. direct labor hours are estimated at 1 for the year. activity cost pool cost driver est. overhead cost driver activity ordering and receiving orders $ 13 500 orders machine setup setups 306000 450 setups machining machine hours 1537500 125000 mh assembly parts 122 1 parts inspection inspections 31 500 inspections if overhead is applied using traditional costing based on direct labor hours, the overhead application rate is

35.035 rate per labour hour

Explanation:

We are asked for the traditional costing system:

The manufacturing overhead will be the sum of each activity cost:

Ordering and Receiving Orders $     130,000

Machine Setup Setups                $   306,000

Machining Machine hours           $ 1,537,500

Assembly Parts                            $ 1,220,000

Inspections                                   $    310,000

Total Overhead:                          $ 3,503,500

Now we divide by the cost drive which is labour hours: 100,000

3,503,500 / 100,000 = 35.035 rate per labor hour

answer: it is a cellular phone