The activity rate for the Processing activity cost pool under activity-based costing is closest to:
A)$2.00 per MH
B)$0.18 per MH
C)$0.24 per MH
D)$1.00 per MH

Question

Quizplus · Accepted Answer

Since activity-based costing is being used, the activity rate for the processing activity cost pool is calculated by dividing the total cost for the Processing activity ($240,000) by the total amount of processing activity (1,000,000 machine hours). Therefore, the activity rate is $0.24 per machine hour (or MH).

The Activity Rate for the Processing Activity Cost Pool Under