Hochberg Corporation uses an activity-based costing system with the following three activity cost pools: The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs: The distribution of resource consumption across activity cost pools is given below: The activity rate for the Fabrication activity cost pool is closest to:
A)$5.30 per machine-hour
B)$3.60 per machine-hour
C)$7.20 per machine-hour
D)$4.80 per machine-hour

Question

Hochberg Corporation uses an activity-based costing system with the following three activity cost pools:  The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs:  The distribution of resource consumption across activity cost pools is given below:  The activity rate for the Fabrication activity cost pool is closest to:
A)$5.30 per machine-hour 
B)$3.60 per machine-hour 
C)$7.20 per machine-hour 
D)$4.80 per machine-hour

Quizplus · Accepted Answer

Allocations to the Fabrication activity cost pool:
 11eaa0c8_9563_a4da_9cb2_a522cc8d9382_TB2487_00 Fabrication: $159, 000 ÷ 30, 000 machine-hours = $5.30 per machine-hour

Hochberg Corporation Uses an Activity-Based Costing System with the Following