Selena Company has two products: A andB.The company uses activity-based costing.The estimated total cost and expected activity for each of the company's three activity cost pools are as follows: The activity rate under the activity-based costing system for Activity 3 is closest to:

Question

Selena Company has two products: A andB.The company uses activity-based costing.The estimated total cost and expected activity for each of the company's three activity cost pools are as follows:  The activity rate under the activity-based costing system for Activity 3 is closest to:

Quizplus · Accepted Answer

To calculate the activity rate for Activity 3, we need to divide the estimated total cost of that activity by the expected activity level. This gives us:
Activity rate for Activity 3 = $1,750 / 80 = $21.875
Rounding this to the nearest cent, we get an activity rate of $21.67, which is closest to option B.

Selena Company Has Two Products: a AndB