1- In step 3 of the ABC process on your spreadsheet calculate the rate to be assigned each activity by:

A- By subtrating the allocated cost assigned to the cost pool by the estimated activity assigned.

B- By multiplying the allocated cost assigned to the cost pool by the estimated activity assigned.

C- By dividing the allocated cost assigned to the cost pool by the estimated activity assigned.

D- By dividing the estimated activity assigned by the number of cost pools.

2- True or False : One of the limitations of Activity Based Costing is that you cannot allocate all costs to the products.

3- Activity Based Costing is used as a decision making tool. In both spreadsheet examples Customer Support is assigned 30% of the cost. What could be concluded from such a high rate/cost?

A- Shipping packaging is poor

B-Customer assembly instructions are poor

C- Product has poor quality

D- All of the above.

Step 3: Calculate the Rate to be assigned each Activity: Activity Cost Pools Percentage of costs Allocated (% X Total Cost) Estimated Activity as assigned by Mgmnt Activity Number of: Rate Assigned Cost/Activity Activity Number per: Product Assembly 1,125,000.00 45% 25,000 Units 45.00 Per Unit Processing of Orders 375,000.00 15% 5,000 Orders $ 75.00 Per Order Customer Support 0 30% 502 Customers Per Customer Other 0 15% N/A N/A N/A