Question

Abel Corporation uses activity-based costing. The company makes two products: Product A and Product B. The annual production and sales of Product A is 340 units and of Product B is 680 units. There are three activity cost pools, with total cost and activity as follows: Total Activity Activity Cost Pools Total Cost Product A Product B Total Activity 1 $ 24,860 750 350 1,100 Activity 2 $ 35,040 1,800 1,400 3,200 Activity 3 $ 10,445 130 230 360 The activity rate for Activity 2 is closest to__________.

Answer 1

Answer:

depreciable amor 10.95 dollars per Activity 2 base cost object.

Explanation:

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

totoal expected cst: 35,040

activity 2 expected cost dirver Total  3,200

Activity rate: $35,040 cost pool / 3,200 driver expected amount = $10.95