The activity rate for setups is $18
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What is meant by activity rate?</h3>
Assigning indirect costs to a cost pool, adding up the expenses in that cost pool, then dividing the sum of those costs by the cost driver results in an activity-based costing rate. The cost pool total divided by the cost driver, which results in the cost driver rate, is the formula for activity-based costing. In activity-based costing, the cost driver rate is used to determine the amount of overhead and indirect costs associated with a specific activity.
Given
Activity Total Activity-Base Usage Budgeted Activity Cost
Setups 10,000 $180,000
Inspections 24,000 $120,000
Assembly (dlh) 80,000 $400,000
Activity Rate is calculated by: Budget Activity Cost/Activity Base Usage
Where Activity Base (for Setup) = 10,000
Budget Activity Cost = $180,000
So, Activity Rate for Setup = $180,000/10,000
Activity Rate for Setup = $18
To learn more about activity rate refer to:
brainly.com/question/17928552
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