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 total estimated activity for the cost pool. In this case, the total estimated overhead cost for the batch setup activity cost pool is $1,090 and the total estimated activity for the cost pool is 20 setups. Therefore, the activity rate is $1,090 / 20 = $54.50.

The Activity Rate Computed at the Beginning of the Year