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