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 | $ | 86,000 | 7,600 | 10,600 | 21,600 | |||||||
Activity 2 | $ | 61,000 | 8,600 | 16,600 | 9,600 | |||||||
Activity 3 | $ | 114,000 | 4,100 | 2,600 | 3,225 | |||||||
Which of the following statements is true regarding this company's activity rates?
Multiple Choice
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The activity rate under the activity-based costing system for Activity 2 is $15.40.
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The activity rate under the activity-based costing system for Activity 2 is $11.49.
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The activity rate under the activity-based costing system for Activity 2 is $3.46.
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The activity rate under the activity-based costing system for Activity 2 is $2.16.
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The activity rate under the activity-based costing system for Activity 2 is $1.75.
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