Asked by Minmint Vanichvorasakul on Jun 04, 2024
Verified
A company uses activity-based costing to determine the costs of its three products: A,B,and C.The budgeted cost and activity for each of the company's three activity cost pools are shown below.
Compute the company's activity rates under activity-based costing for each of the three activities.
Activity-Based Costing
A costing methodology that assigns costs to products or services based on the resources they consume, focusing on activities as the fundamental cost drivers.
Activity Rates
Rates used in activity-based costing to allocate overhead costs to products or services based on their consumption of activities.
Activity Cost Pools
Accumulation of overhead costs intended to be allocated to various activities based on their cost drivers.
- Master the concepts and perform calculations pertaining to activity-based costing.
Verified Answer
Activity 2: $54,000/(2,500 + 2,000 + 1,500)= $9.00
Activity 3: $28,000/(15,000 + 25,000 + 30,000)= $0.40
Learning Objectives
- Master the concepts and perform calculations pertaining to activity-based costing.
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