Question
Austad Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
Austad Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
Activity Cost Pools (and Activity Measures) | Estimated Overhead Cost |
Machine related (machine-hours) | $67,500 |
Batch setup (setups) | $273,700 |
General factory (direct labour-hours) | $204,000 |
Expected Activity | |||
Activity Cost Pools | Total | Product X | Product Y |
Machine related | 5,000 | 4,000 | 1,000 |
Batch setup | 7,000 | 3,000 | 4,000 |
General factory | 8,000 | 1,000 | 7,000 |
The activity rate for the batch setup activity cost pool is closest to:
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Government and Not-for-Profit Accounting Concepts and Practices
Authors: Michael H. Granof, Saleha B. Khumawala, Thad D. Calabrese, Daniel L. Smith
8th edition
1119495814, 1119495857, 1119495819, 9781119495819 , 978-1119495857
