Canton 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 $942,000 for the period.Support cost requirements of both products are substantially different from one another.Canton uses an ABC costing system.
The setups activity-cost driver rate is ________.
A)$6.10 per setup
B)$5.80 per setup
C)$4.15 per setup
D)$15.50 per setup

Question

Canton 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 $942,000 for the period.Support cost requirements of both products are substantially different from one another.Canton uses an ABC costing system.
The setups activity-cost driver rate is ________.
A)$6.10 per setup 
B)$5.80 per setup 
C)$4.15 per setup 
D)$15.50 per setup

Quizplus · Accepted Answer

Setups activity-cost driver rate = $261,000 ÷ 45,000 setups = $5.80 per setup