I am trying to determine the cost driver rate for the following. I actually tried the problem using this formula: 455,000/(14,000 + 3,500) Here I added the manufacturing supports cost and direct labor cost divided by the total of the direct labor hours and direct labor cost.

I do not think I am doing this correctly can someone please help.

Manufacturing support cost = $350,000
Machine hours = 14,000
Direct labor hours = 3,500
Direct labor cost = $105,000

Once again how will I determine the cost driver rate?

Please help!!!:(

You have to determine which activity that drives the manufacturing support cost, and calculate the rate by dividing the manufacturing support costs by that driver. I would personally feel that the activity would be either labor hours or machine hours. For labor hours the rate will be 100 per labor hour and 25 per machine hour

Thans for your help