Question

apone has the following estimates for the upcoming year: Activity Cost Pool Estimated Overhead Cost Estimated Activity Machine-related $ 96,250 27,500 machine-hours Machine setups $ 62,500 350 setups Product testing $ 124,500 1,880 tests Production orders $ 159,500 300 orders Compute the activity rate for product testing cost pool (Round your answer to 2 decimal places).

Answer 1

Answer:

Activity rate for testing $66.22 per test

Explanation:

we will divide the cost pool over the expected activity base

In this case we divide the $124,500 over the 1,880 tests

$\frac{Activity\: Pool}{Activity \: base}= Activity\:Rate$

124,500 / 1,880 = 66,2234 = 66.22