Asked by Sophia Chiang on May 01, 2024
Verified
Strama, Inc., manufactures and sells two products: Product A6 and Product I5.The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: 
The activity rate for the General Factory activity cost pool under activity-based costing is closest to:
A) $21.25 per MH
B) $111.96 per MH
C) $45.22 per MH
D) $19.23 per MH
General Factory
A facility where a variety of goods are manufactured or assembled, usually implying a broad range of production activities.
Activity Cost Pool
A grouping of all the costs related to a particular activity in the process of costing in an activity-based costing system.
- Assess the activity rates pertinent to designated cost pools.
Verified Answer
CZ
Chelsea ZaldivarMay 06, 2024
Final Answer :
D
Explanation :
Activity rate = Estimated overhead cost ÷ Total expected activity
= $171,147 ÷ 8,900 MHs = $19.23 per MH
= $171,147 ÷ 8,900 MHs = $19.23 per MH
Learning Objectives
- Assess the activity rates pertinent to designated cost pools.