The 195 Factory produces replacement parts and assemblies for vintage Cessna aircraft. The company is considering replacing its current costing system with an activity-based approach. It has identified three activities: computer-aided design; fabrication; and assembly and finishing. Data regarding these activities has been collected in the table below.

- What is the activity cost rate for the computer-aided design activity?
A) $500 per computer hour
B) $300 per machine hour
C) $250 per labor hour
D) $1,000 per computer hour

Question

The 195 Factory produces replacement parts and assemblies for vintage Cessna aircraft. The company is considering replacing its current costing system with an activity-based approach. It has identified three activities: computer-aided design; fabrication; and assembly and finishing. Data regarding these activities has been collected in the table below.

- What is the activity cost rate for the computer-aided design activity?

- What is the activity cost rate for the computer-aided design activity?
A) $500 per computer hour 
B) $300 per machine hour 
C) $250 per labor hour 
D) $1,000 per computer hour

Quizplus · Accepted Answer

The activity cost rate for the computer-aided design activity is $500 per computer hour.

The 195 Factory Produces Replacement Parts and Assemblies for Vintage