The Chinese Teapot Company manufactures plastic and ceramic teapots. The company’s western plant has changed from a labor-intensive operation to a robotics environment. As a result, management is considering changing from a direct-labor based overhead rate to an activity-based cost method. The controller has chosen the following activity cost pools and cost drivers for the factory overhead: Expected
Cost Driver Annual
Number of orders
Number of set-ups
Number of tests
Compute the overhead rate for each cost driver.