Privott, Inc., manufactures and sells two products: Product Z9 and Product N0.The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:
A)$91.49 per DLH
B)$934.30 per DLH
C)$114.37 per DLH
D)$34.47 per DLH

Question

Privott, Inc., manufactures and sells two products: Product Z9 and Product N0.The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:
A)$91.49 per DLH 
B)$934.30 per DLH 
C)$114.37 per DLH 
D)$34.47 per DLH

Quizplus · Accepted Answer

Activity rate = Estimated overhead cost ÷ Total expected activity
= $324,018 ÷ 9,400 DLHs = $34.47 per DLH