Question
Forner, Incorporated, manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools,
Forner, Incorporated, manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
| Activity Cost Pools | Activity Measures | Estimated Overhead Cost | Expected Activity | ||
|---|---|---|---|---|---|
| Product Z1 | Product Z8 | Total | |||
| Labor-related | DLHs | $ 134,500 | 9,600 | 4,800 | 14,400 |
| Machine setups | setups | 63,430 | 1,300 | 200 | 1,500 |
| Order size | MHs | 992,100 | 3,100 | 3,900 | 7,000 |
| $ 1,190,030 | |||||
The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
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Using Financial Accounting Information The Alternative to Debits and Credits
Authors: Gary A. Porter, Curtis L. Norton
7th Edition
978-0-538-4527, 0-538-45274-9, 978-1133161646
