Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 2. a plus company uses activity-based costing to d

2. A Plus Company uses activity-based costing to determine the costs of its three products: A, B,...

Free

90.2K

Verified Solution

Question

Accounting

2.

A Plus Company uses activity-based costing to determine thecosts of its three products: A, B, and C. The budgeted cost andactivity for each of the company's three activity cost pools areshown in the following table:

Budgeted Activity
Activity Cost PoolBudgeted CostProduct AProduct BProduct C
Activity 1$70,0006,0009,00020,000
Activity 2$45,0007,00015,0008,000
Activity 3$82,0002,5001,0001,625


Which of the following statements is true regarding this company'sactivity rates?

Multiple Choice

  • The activity rate under the activity-based costing system forActivity 2 is $2.81.

  • The activity rate under the activity-based costing system forActivity 2 is $16.00.

  • The activity rate under the activity-based costing system forActivity 2 is $19.50.

  • The activity rate under the activity-based costing system forActivity 2 is $1.50.

  • The activity rate under the activity-based costing system forActivity 2 is $2.00.

Answer & Explanation Solved by verified expert
4.0 Ratings (577 Votes)

Correct answer-------The activity rate under the activity-based costing system for Activity 2 is $1.50.

Working

Calculation of Activity rates
Activity Cost Pool Activity driver Overhead Cost Expected Activity (B) Activity rate (A/B)
Activity 1 Number of Activity $         70,000.00 35,000 $            2.00 Per Activity
Activity 2 Number of Activity $         45,000.00 30000 $            1.50 Per Activity
Activity 3 Number of Activity $         82,000.00 5125 $          16.00 Per Activity

As it can be seen $16 per activity is rate for Activity 3 not 2 and $ 2 is rate for activity 1.
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Answer the questions: -What is 'Good?' -What is 'Deviant?' -Why? I want you to make a post with as...

Psychology
Q

Consider the Characteristics of Design Thinkers. Which of these characteristics describe you? Give an example of...

Electrical Engineering
Q

it is a scenario-based question from operations management. ABC collects the plants from the BC forests...

General Management
Q

What is the function of the instruction decoder in 8085 O Identifies instruction Determine number...

Physics
Q

In your own words, define the following. (a)Secant line(b)Tangent line(c) Instantaneous rate of change

Calculus
Q

roblem 1 For what value of the constant c is the following function continuous at...

Calculus
Q

3 Solve the following system of linear equations using the inverse of the coefficient matrix...

Algebra
Q

Find the values of the six trigonometric functions of 0 HI3 TC 7 0 8...

Algebra
Q

Which of the following cash transfers results in a misstatement of cash at December 31...

Accounting
Q

Paulis Kennel uses tenant-days as its measure of activity, an animal housed in the kennel...

Accounting
Q

Background: As the owner of a local CPA firm, you have been hired to help...

Accounting
Q

the last person gave those answers and they incorrect Consider the...

Finance