Marchan,Inc. ,manufactures and sells two products: Product K1 and Product S6.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: 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 General Factory activity cost pool under activity-based costing is closest to:

Question

Marchan,Inc. ,manufactures and sells two products: Product K1 and Product S6.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below:  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 General Factory activity cost pool under activity-based costing is closest to:

Quizplus · Accepted Answer

Activity rate = Estimated overhead cost ÷ Total expected activity
= $452,868 ÷ 7,800 MHs = $58.06 per MH