Question
A firm wants to use approximated ABC that uses just two activity rates (using the two largest activity cost pools). Before approximating their ABC system,
A firm wants to use approximated ABC that uses just two activity rates (using the two largest activity cost pools). Before approximating their ABC system, they have the following activity cost pools (budgeted driver amounts are given in parentheses).
- Cost pool A: $212,072 (372)
- Cost pool B: $10,435 (557)
- Cost pool C: $7,319 (359)
- Cost pool D: $171,756 (1058)
- Cost pool E: $21,670 (1144)
- Cost pool F: $15,815 (1145)
- Cost pool G: $5,064 (1727)
What is the new activity rate for Cost pool D (round to nearest cent)?
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Management Accounting Information for creating and managing value
Authors: Kim Langfield Smith, David Smith, Paul Andon, Ronald Hilton, Helen Thorne
8th edition
9781760420413 , 978-1760420406
