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A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:

				Budgeted Activity
Activity Cost Pool	Budgeted Cost			Product A			Product B			Product C
Activity 1	$	78,000			6,800			9,800			20,800
Activity 2	$	53,000			7,800			15,800			8,800
Activity 3	$	98,000			3,300			1,800			2,425

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

Multiple Choice

The activity rate under the activity-based costing system for Activity 2 is $13.02.

The activity rate under the activity-based costing system for Activity 2 is $2.09.

The activity rate under the activity-based costing system for Activity 2 is $3.14.

The activity rate under the activity-based costing system for Activity 2 is $1.64.

The activity rate under the activity-based costing system for Activity 2 is $16.74.

The following data relates to Black-Out Company's estimated amounts for next year.

Estimated:	Department 1				Department 2
Manufacturing overhead costs	$	660,000			$	976,000
Direct labor hours		78,000	DLH			98,000	DLH
Machine hours		2,800	MH			3,800	MH

What is the company's plantwide overhead rate if machine hours are the allocation base? (Round your answer to two decimal places.)

Multiple Choice

$8.46 per MH

$173.68 per MH

$3.52 per MH

$247.88 per MH

$112.86 per MH

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