Asked by caglar gokbulut on May 11, 2024
Verified
Boesenhofer, Inc., manufactures and sells two products: Product N6 and Product N7.The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: 
The activity rate for the Machine Setups activity cost pool is closest to:
A) $73.57 per setup
B) $91.81 per setup
C) $26.24 per setup
D) $28.32 per setup
Machine Setups
The configuration and preparations of machines before commencing the manufacturing of a different product or batch.
Activity Cost Pool
A collection of all costs associated with a particular activity, used in activity-based costing to allocate costs more accurately.
- Ascertain the rates of specific activities within designated cost pools.
Verified Answer
SJ
Stacy JonesMay 18, 2024
Final Answer :
B
Explanation :
To calculate the activity rate for Machine Setups activity cost pool, we need to divide the total cost of the activity pool by the total number of setups.
Total cost of the Machine Setups pool = $551,250
Total number of setups = 6,000
Activity rate = Total cost of the activity pool / Total number of setups = $551,250 / 6,000 = $91.81 per setup
Therefore, the closest answer choice is B.
Total cost of the Machine Setups pool = $551,250
Total number of setups = 6,000
Activity rate = Total cost of the activity pool / Total number of setups = $551,250 / 6,000 = $91.81 per setup
Therefore, the closest answer choice is B.
Explanation :
Activity rate = Estimated overhead cost ÷ Total expected activity
= $128,534 ÷ 1,400 setups = $91.81 per setup
= $128,534 ÷ 1,400 setups = $91.81 per setup
Learning Objectives
- Ascertain the rates of specific activities within designated cost pools.