Asked by Ramon Gonzalez on Jun 25, 2024
Verified
Privott, Inc., manufactures and sells two products: Product Z9 and Product N0.The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: 
The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:
A) $91.49 per DLH
B) $934.30 per DLH
C) $114.37 per DLH
D) $34.47 per DLH
Labor-Related
Associated with the work performed by employees or workers, including wages, benefits, and other employment costs.
Activity Cost Pool
A way to accumulate costs associated with a specific activity, such as quality control testing or machine setup, making it easier to assign those costs to products.
- Calculate the cost rates for particular activity pools.
Verified Answer
JC
Jamel Clariss PintoJul 01, 2024
Final Answer :
D
Explanation :
Activity rate = Estimated overhead cost ÷ Total expected activity
= $324,018 ÷ 9,400 DLHs = $34.47 per DLH
= $324,018 ÷ 9,400 DLHs = $34.47 per DLH
Learning Objectives
- Calculate the cost rates for particular activity pools.