Homework Answers
Correct answer------------$561000
Working
| Calculation of Activity rates | |||||
| Activity Cost Pool | Activity driver | Overhead Cost (A) | Expected Activity (B) | Activity rate (A/B) | |
| Inspection | Number of inspection | $ 1,551,000 | 94 | $ 16,500.00 | Per inspection |
.
.
| Cost assigned to Basic model | |||
| Activity name | Activity Rates | Activity | ABC Cost |
| (A) | (B) | (A x B) | |
| Inspection | $ 16,500.00 | 34.00 | $ 561000.00 |
.
| Basic | Luxury | Total | |
| Units produced | 3400 | 600 | |
| Divided by: Tests interval Units | 100 | 10 | |
| Number of tests | 34 | 60 | 94 |
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