Asked by Jalen Denoncourt on May 11, 2024
Verified
The activity rate for the batch setup activity cost pool is closest to:
A) $48.40 per setup
B) $38.70 per setup
C) $74.30 per setup
D) $193.50 per setup
Batch Setup
The process of preparing machines and equipment for a specific batch of production, including adjustments and calibrations.
Activity Cost Pool
A way to aggregate all costs associated with a particular business activity, facilitating more accurate allocation of overheads to products or services.
- Analyze and determine the rates of different activities across various cost pools as prescribed by activity-based costing.
Verified Answer
AA
Arjwan AlaniMay 12, 2024
Final Answer :
B
Explanation :
To calculate the activity rate for the batch setup activity cost pool, we need to divide the total cost of $154,800 by the total number of setups, which is 4,000.
Activity rate = Total cost / Total number of setups
Activity rate = $154,800 / 4,000
Activity rate = $38.70 per setup
Therefore, the closest activity rate is option B) $38.70 per setup.
Activity rate = Total cost / Total number of setups
Activity rate = $154,800 / 4,000
Activity rate = $38.70 per setup
Therefore, the closest activity rate is option B) $38.70 per setup.
Explanation :
Activity rate = Estimated overhead cost ÷ Expected activity = $387,000 ÷ 10,000 setups = $38.70 per setup
Learning Objectives
- Analyze and determine the rates of different activities across various cost pools as prescribed by activity-based costing.
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