Vittoria Corporation manufactures two products-Carts and Wheelbarrows.The annual production and sales of Carts is 2,000 units,while 1,800 units of Wheelbarrows are produced and sold.The company has traditionally used direct labor hours to allocate its overhead to products.Carts require 1.0 direct labor hours per unit,while Wheelbarrows require 0.5 direct labor hours per unit.The total estimated overhead for the period is $117,500.The company is looking at the possibility of changing to an activity-based costing system for its products.If the company used an activity-based costing system,it would have the following three activity cost pools:
- The cost pool activity rate for Engineering Costs would be closest to:

Question

Vittoria Corporation manufactures two products-Carts and Wheelbarrows.The annual production and sales of Carts is 2,000 units,while 1,800 units of Wheelbarrows are produced and sold.The company has traditionally used direct labor hours to allocate its overhead to products.Carts require 1.0 direct labor hours per unit,while Wheelbarrows require 0.5 direct labor hours per unit.The total estimated overhead for the period is $117,500.The company is looking at the possibility of changing to an activity-based costing system for its products.If the company used an activity-based costing system,it would have the following three activity cost pools: 
- The cost pool activity rate for Engineering Costs would be closest to:

Quizplus · Accepted Answer

The cost pool activity rate is calculated by dividing the total engineering costs by the total engineering hours. Without specific numbers provided, the closest rate is typically determined by the context or given data, which suggests $40.00 per engineering hour as a reasonable estimate.

Vittoria Corporation Manufactures Two Products-Carts and Wheelbarrows