Huelskamp Corporation has provided the following data concerning its overhead costs for the coming year: The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year:
The Other activity cost pool does not have a measure of activity; it is used to accumulate costs of idle capacity and organization-sustaining costs.
The distribution of resource consumption across activity cost pools is given below: The activity rate for the Assembly activity cost pool is closest to:
A) $2.65 per labor-hour
B) $3.85 per labor-hour
C) $2.85 per labor-hour
D) $2.75 per labor-hour

Question

Huelskamp Corporation has provided the following data concerning its overhead costs for the coming year:  The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year:
 The Other activity cost pool does not have a measure of activity; it is used to accumulate costs of idle capacity and organization-sustaining costs.
The distribution of resource consumption across activity cost pools is given below:  The activity rate for the Assembly activity cost pool is closest to:
A) $2.65 per labor-hour 
B) $3.85 per labor-hour 
C) $2.85 per labor-hour 
D) $2.75 per labor-hour

Quizplus · Accepted Answer

Allocations to the Assembly activity cost pool:
 11eacbfc_c663_12fd_8ffe_35f0fc85f62f_TB7552_00 Assembly: $171,000 ÷ 60,000 labor-hours = $2.85 per labor-hour

Huelskamp Corporation Has Provided the Following Data Concerning Its Overhead