Question
A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of
A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:
Budgeted Activity | ||||||||||||
Activity Cost Pool | Budgeted Cost | Product A | Product B | Product C | ||||||||
Activity 1 | $ | 78,000 | 6,800 | 9,800 | 20,800 | |||||||
Activity 2 | $ | 53,000 | 7,800 | 15,800 | 8,800 | |||||||
Activity 3 | $ | 98,000 | 3,300 | 1,800 | 2,425 | |||||||
Which of the following statements is true regarding this company's activity rates?
Multiple Choice
The activity rate under the activity-based costing system for Activity 2 is $13.02.
The activity rate under the activity-based costing system for Activity 2 is $2.09.
The activity rate under the activity-based costing system for Activity 2 is $3.14.
The activity rate under the activity-based costing system for Activity 2 is $1.64.
The activity rate under the activity-based costing system for Activity 2 is $16.74.
The following data relates to Black-Out Company's estimated amounts for next year.
Estimated: | Department 1 | Department 2 | |||||
Manufacturing overhead costs | $ | 660,000 | $ | 976,000 | |||
Direct labor hours | 78,000 | DLH | 98,000 | DLH | |||
Machine hours | 2,800 | MH | 3,800 | MH | |||
What is the company's plantwide overhead rate if machine hours are the allocation base? (Round your answer to two decimal places.)
Multiple Choice
$8.46 per MH
$173.68 per MH
$3.52 per MH
$247.88 per MH
$112.86 per MH
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