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 $83,000 7,300 10,300 21,300 Activity 2 $58,000 8,300 16,300 9,300 Activity 3 $108,000 3,800 2,300 2,925 Which of the following statements is true regarding this company's activity rates? The activity rate under the activity-based costing system for Activity 2 is $2.13. The activity rate under the activity-based costing system for Activity 2 is $11.97. The activity rate under the activity-based costing system for Activity 2 is $1.71. The activity rate under the activity-based costing system for Activity 2 is $15.81. The activity rate under the activity-based costing system for Activity 2 is $3.34.
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