Asked by Preanna Williams on Jun 25, 2024
Verified
The activity rate for the Production Orders activity cost pool under activity-based costing is closest to:
A) $56.91 per order
B) $24.44 per order
C) $98.46 per order
D) $100.60 per order
Production Orders
Instructions or commands produced to initiate the manufacture of a specific quantity of goods at a specified time.
- Assess and determine activity rates for a range of activity cost pools guided by the principles of activity-based costing.
Verified Answer
ZK
zarin kassamaliJun 29, 2024
Final Answer :
B
Explanation :
To find the activity rate, we divide the total cost of the Production Orders activity cost pool by the total number of orders.
Activity rate = Total cost of Production Orders activity cost pool / Total number of orders
= $733,200 / 30,000 orders
= $24.44 per order.
Therefore, the closest activity rate for the Production Orders activity cost pool is $24.44 per order, which is option B.
Activity rate = Total cost of Production Orders activity cost pool / Total number of orders
= $733,200 / 30,000 orders
= $24.44 per order.
Therefore, the closest activity rate for the Production Orders activity cost pool is $24.44 per order, which is option B.
Explanation :
Activity rate = Estimated overhead cost ÷ Total expected activity
= $26,884 ÷ 1,100 orders = $24.44 per order
= $26,884 ÷ 1,100 orders = $24.44 per order
Learning Objectives
- Assess and determine activity rates for a range of activity cost pools guided by the principles of activity-based costing.
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