Question
Privott, Incorporated, manufactures and sells two products: Product Z9 and Product NO. The company is considering adopting an activity-based costing system with the following activity
Privott, Incorporated, manufactures and sells two products: Product Z9 and Product NO. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Activity Cost Pools
Labor-related
Product testing.
Order size
Activitv
Measures
DLHS tests
MHs
Estimated
Overhead
Cost
$ 324,018
45,747
471, 108
$ 840,873
Expected Activity
Product Z9 Product NO
6,400
3,000
400
500
4,000
4,300
Total
9,400
900
8,300
The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:
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Managerial Accounting
Authors: Linda Smith Bamber, Karen Wilken Braun, Jr. Harrison, Walter T.
1st Edition
0138129711, 978-0138129712
