Asked by NOYAN ALI.K on Jun 23, 2024
Verified
The activity rates in activity-based costing are computed by dividing the direct labor-hours for an activity cost pool by the measure of activity for the activity cost pool.
Activity Rates
The costs or rates associated with specific activities used in activity-based costing to allocate expenses to products or services.
Activity Cost Pool
A way to aggregate all indirect costs associated with a particular activity, aiding in more accurate cost allocation.
Direct Labor-Hours
The total hours worked by employees who are directly involved in the manufacturing process or providing service to customers.
- Identify how activity rates are computed and applied in activity-based costing.
Verified Answer
BZ
Benny ZhuangJun 28, 2024
Final Answer :
False
Explanation :
The activity rate in activity-based costing is computed by dividing the total cost for an activity cost pool by the measure of activity for the activity cost pool, not by the direct labor-hours.
Learning Objectives
- Identify how activity rates are computed and applied in activity-based costing.