Question

Steven Co. has two products: A and B. The following is information about the assembly activity...

Steven Co. has two products: A and B. The following is information about the assembly activity in its factory:

Estimated cost Estimated activity
Product A Product B Total
Assembly $14,000 510 250 760


The activity rate for the Assembly Department is closest to:

a.$54.12.

b.$18.42.

c.$21.90.

d.$57.94.

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Answer #1

Activity rate

= Total estimated cost/Total allocation base

= 14,000/(510+250)

= 14,000/760

= 18.42

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