Zumbrunnen Corporation uses activity-based costing to compute product margins.Overhead costs have already been allocated to the company's three activity cost pools-Processing, Supervising, and Other.The costs in those activity cost pools appear below: Processing costs are assigned to products using machine-hours (MHs)and Supervising costs are assigned to products using the number of batches.The costs in the Other activity cost pool are not assigned to products.Activity data appear below: Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. The activity rate for the Supervising activity cost pool under activity-based costing is closest to:
A)$8.00 per batch
B)$26.67 per batch
C)$46.80 per batch
D)$82.00 per batch

Question

Zumbrunnen Corporation uses activity-based costing to compute product margins.Overhead costs have already been allocated to the company's three activity cost pools-Processing, Supervising, and Other.The costs in those activity cost pools appear below:  Processing costs are assigned to products using machine-hours (MHs)and Supervising costs are assigned to products using the number of batches.The costs in the Other activity cost pool are not assigned to products.Activity data appear below:  Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.  The activity rate for the Supervising activity cost pool under activity-based costing is closest to:
A)$8.00 per batch 
B)$26.67 per batch 
C)$46.80 per batch 
D)$82.00 per batch

Quizplus · Accepted Answer

Supervising: $46, 800 ÷ 1, 000 batches = $46.80 per batch

Zumbrunnen Corporation Uses Activity-Based Costing to Compute Product Margins