Costs assigned to an activity pool for teaching children to swim at the regional park are $2,700 per month. Number of students is chosen as the cost driver. On average, 300 students take swim lessons monthly. What is the ABC allocation rate for this activity?
A) Not enough information given
B) $27.00
C) $9.00
D) $0.90

Question

Quizplus · Accepted Answer

ABC allocation rate = Total activity pool cost / Total number of units of cost driver

Total activity pool cost = $2,700 per month
Total number of units of cost driver = 300 students per month

ABC allocation rate = $2,700 / 300 = $9.00 per student

Therefore, the best choice is C.

Costs Assigned to an Activity Pool for Teaching Children to Swim