In ABC, how is the activity allocation rate computed?
A)The total estimated activity allocation base is divided by the total estimated activity cost pool.
B)The total estimated activity cost pool is divided by the total estimated activity allocation base.
C)The total estimated activity allocation base is multiplied by the total estimated activity cost pool.
D)You take the total estimated activity allocation base and subtract the total estimated total activity cost pool.

Question

Quizplus · Accepted Answer

The activity allocation rate is computed by dividing the total estimated activity cost pool by the total estimated activity allocation base. This rate is then used to allocate the costs of each activity to the products or services that use them based on their usage of the activity allocation base.

In ABC, How Is the Activity Allocation Rate Computed