The activity rate computed at the beginning of the year for the batch setup activity cost pool is closest to:

Question

Quizplus · Accepted Answer

The activity rate is calculated by dividing the total estimated overhead cost for the activity cost pool by the estimated activity level. In this case, the total estimated overhead cost for the batch setup activity cost pool is $381.60 and the estimated activity level is 8,000 batches. Therefore, the activity rate is $381.60 / 8,000 batches = $0.0477 per batch.

The Activity Rate Computed at the Beginning of the Year