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Activity cost pools

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U4A1 Problem 2
You have given this information for ABC Corporation. What is the Activity Rate for the three Activity costs Pools?
Activity Cost Pools total Costs Total Activity Activity Rate
Producing Units $500,000 1,000 machine hours ? per machine hour

Processing orders $100,000 1,000 customer orders ? per order

Customer Support $400,000 100 customers ? per customer

U4 A1 problem 3

Activity Measures Mine Own Firm makes Muscle Cars. Please Complete the table by providing an example of an activity measure for each acitvity.

Activity Level of Activity Example of Activity Measures

President working on Budget for year Organization

Designing a part for the cars Product

Sales calls by Sales people Customer

setting up equipment at plant Batch

direct labor on product unit

Example of Activity Measures

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Solution Summary

The solution computes the Activity Rate for the three Activity costs Pools and provide an example of an activity measure for each activity.

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Activity rate for each of the activity cost pools

As You Like It Gardening is a small gardening service that uses activity-based costing to estimate costs for pricing and other purposes. The proprietor of the company believes that costs are driven primarily by the size of customer's lawns, the size of customer garden beds, the distance to travel to customers, and the number of customers. In addition, the costs of maintaining garden beds depends on whether the beds are low- maintenance beds ( mainly ordinary trees and shrubs) or high-maintenance beds ( mainly flowers and exotic plants). Accordingly, the company uses the five activity cost pools listed below:

Required: compute the activity rate for each of the activity cost pools.

on attatchment

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