What is the correct entry for the following error of the transaction. A collection on account from a customer for $780 was recorded as a debit to Cash of $780 and a credit to Service Revenue of $780.

Set up= $18 per set up

Explanation:

Giving the following information:

Activity Pool Activity Base Budgeted Amount

Setups 10,000 $180,000

To calculate the activity rate, we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Set up= 180,000 / 10,000

Set up= $18 per set up