Quality Carvings manufactures furniture. They have decided to develop an activity-based costing system. Shown below is each activity, its cost and the activity driver used to assign these costs to products.
Under an activity-based costing system, what is the activity cost per unit of activity driver for processing orders?

Question

Quality Carvings manufactures furniture. They have decided to develop an activity-based costing system. Shown below is each activity, its cost and the activity driver used to assign these costs to products. 
Under an activity-based costing system, what is the activity cost per unit of activity driver for processing orders?

Quizplus · Accepted Answer

To calculate the activity cost per unit of activity driver for processing orders, we need to divide the total cost of the activity by the total units of the activity driver.

Total cost of processing orders = $126,000
Total units of activity driver for processing orders = 5,000

Activity cost per unit of activity driver for processing orders = $126,000 / 5,000 = $25.20

Therefore, the answer is B.

Quality Carvings Manufactures Furniture