The activity rate
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Abrams Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 300 units and of Product B is 1,000 units. There are three activity cost pools, with estimated costs and expected activity as follows:
Expected Activity
Activity Cost Pool Estimated Cost Product A Product B Total
Activity 1 7,356 200 200 400
Activity 2 30,555 1,400 700 2,100
Activity 3 16,169 90 300 390
Reference: 8-13
The activity rate for Activity 3 is closest to:
138.67
53.906
18.71
41.46
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Solution Summary
The activity rate is determined.
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