Question

Jennifer Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows: 

The activity rate under the activity based costing system for Supporting customers is closest to:

Answer 1

The activity rate under supporting customers are

= $ 38.44

Explanation -

Activity rate = Estimated cost ÷ Total expected activity

Estimated cost of supporting activity = $ 34,600

Total expected activity = 600 + 300 = 900

Activity rate =

$ 34,600/900 = $ 38.44 approx.

Answer 2