5. Which of the following is NOT a reason why activity based costing should be used rather than traditional costing? A. Today, indirect costs make up most of total manufacturing costs B. Product diversity has increased, and more different products have to be costed C. Inflation has made cost of direct materials higher D. Product competition has made it more difficult to set prices however you want. 6. Which of the following is the best cost driver for an activity cost pool containing activities related to product development? A. Machine hours B. Number of parts in a product C. Direct material cost D. Number of different types of indirect materials 7. Wilson Company has two products: A and B. The company uses activity-based costing. The total overhead cost and activity for each of the company's three activity cost pools are as follows: Activity Cost Pool Activity 1.......... Activity 2 Activity 3 Total Cost $23,500 $18,000 $34,600 Product A 400 500 600 Total Activity Product B 100 200 300 Total 500 700 900 The activity rate under the activity-based costing system for Activity 3 is closest to: A. $19.22 B. $36.24 C. $38.44 D. $57.67