Canton's Corp. manufactures two sizes of ceramic paperweights, regular and jumbo. The following information applies to their expectations for the planning period:

Expected direct costs amounts to $928,000 for the period. Support cost requirements of both products are substantially different from one another. Canton's uses an ABC costing system.
The inspections activity-cost driver rate is ________.
A) $0.44
B) $5.70
C) $6.20
D) $13.08

Question

Canton's Corp. manufactures two sizes of ceramic paperweights, regular and jumbo. The following information applies to their expectations for the planning period:

Expected direct costs amounts to $928,000 for the period. Support cost requirements of both products are substantially different from one another. Canton's uses an ABC costing system.
The inspections activity-cost driver rate is ________.
A) $0.44 
B) $5.70 
C) $6.20 
D) $13.08

Quizplus · Accepted Answer

Inspections activity-cost driver rate = $135,780 ÷ 21,900 inspections = $6.20 per inspection