Costs assigned to an activity pool for teaching children to swim at the Leisure Centre 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

The ABC allocation rate for this activity can be calculated as follows:
ABC allocation rate = Total cost of activity pool / Number of cost drivers
ABC allocation rate = $2,700 / 300 students
ABC allocation rate = $9.00 per student
Therefore, the correct answer is C, $9.00.

Costs Assigned to an Activity Pool for Teaching Children to Swim