Strama, Inc., manufactures and sells two products: Product A6 and Product I5.The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The activity rate for the General Factory activity cost pool under activity-based costing is closest to:
A)$21.25 per MH
B)$111.96 per MH
C)$45.22 per MH
D)$19.23 per MH

Question

Strama, Inc., manufactures and sells two products: Product A6 and Product I5.The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  The activity rate for the General Factory activity cost pool under activity-based costing is closest to:
A)$21.25 per MH 
B)$111.96 per MH 
C)$45.22 per MH 
D)$19.23 per MH

Quizplus · Accepted Answer

Activity rate = Estimated overhead cost ÷ Total expected activity
= $171,147 ÷ 8,900 MHs = $19.23 per MH