Moyle Corporation has provided the following data from its activity-based costing accounting system: The activity rate for the Designing Products activity cost pool is closest to:
A)$396,900 per product design hour
B)$62 per product design hour
C)$162 per product design hour
D)$52 per product design hour

Question

Moyle Corporation has provided the following data from its activity-based costing accounting system:  The activity rate for the Designing Products activity cost pool is closest to:
A)$396,900 per product design hour 
B)$62 per product design hour 
C)$162 per product design hour 
D)$52 per product design hour

Quizplus · Accepted Answer

To calculate the activity rate for Designing Products, divide the total cost of the activity pool by the total number of product design hours: $1,620,000 / 10,000 hours = $162 per product design hour. Therefore, the closest answer choice is C.

Note: Answer choice A is incorrect because it is calculated by dividing the total cost of all activity pools by the total number of product design hours, which would result in allocating the costs of other activities to the Designing Products activity pool. Answer choice B is too low and answer choice D is too high compared to the actual activity rate calculated. Designing products activity rate: $396,900 ÷ 2,450 product design hours = $162 per product design hour

Moyle Corporation Has Provided the Following Data from Its Activity-Based