The activity rate for the Production Orders activity cost pool under activity-based costing is closest to:
A)$56.91 per order
B)$24.44 per order
C)$98.46 per order
D)$100.60 per order

Question

Quizplus · Accepted Answer

To find the activity rate, we divide the total cost of the Production Orders activity cost pool by the total number of orders. 
Activity rate = Total cost of Production Orders activity cost pool / Total number of orders
= $733,200 / 30,000 orders
= $24.44 per order. 
Therefore, the closest activity rate for the Production Orders activity cost pool is $24.44 per order, which is option B. Activity rate = Estimated overhead cost ÷ Total expected activity
= $26,884 ÷ 1,100 orders = $24.44 per order

The Activity Rate for the Production Orders Activity Cost Pool