Clenney Corporation uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to the four activity cost pools shown below.
Required:
a. Under the proposed ABC system, what is the activity rate for the Machining activity cost pool?
b. Under the proposed ABC system, what is the activity rate for the Machine Setups activity cost pool?
c. Under the proposed ABC system, what is the activity rate for the Product Design activity cost pool?
d. Under the proposed ABC system, what is the activity rate for the Order size activity cost pool?

Question

Clenney Corporation uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to the four activity cost pools shown below.
  Required:
a. Under the proposed ABC system, what is the activity rate for the Machining activity cost pool?
b. Under the proposed ABC system, what is the activity rate for the Machine Setups activity cost pool?
c. Under the proposed ABC system, what is the activity rate for the Product Design activity cost pool?
d. Under the proposed ABC system, what is the activity rate for the Order size activity cost pool?

Quizplus · Accepted Answer

The Answer of Clenney Corporation uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to the four activity cost pools shown below.
  Required:
a. Under the proposed ABC system, what is the activity rate for the Machining activity cost pool?
b. Under the proposed ABC system, what is the activity rate for the Machine Setups activity cost pool?
c. Under the proposed ABC system, what is the activity rate for the Product Design activity cost pool?
d. Under the proposed ABC system, what is the activity rate for the Order size activity cost pool?

Clenney Corporation Uses a Plantwide Overhead Rate Based on Direct