Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe.The company, which uses activity-based costing, has identiﬁed ﬁve activities (and related cost drivers).Each activity, its budgeted cost, and related cost driver is identiﬁed below. The following information pertains to the three product lines for next year: What is Barnett's pool rate for the automated machinery activity?
A)$24.00 per machine hour.
B)$24.50 per labor hour.
C)$49.42 per unit.
D)$50.00 per machine hour.
E)None of the answers is correct.

Question

Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe.The company, which uses activity-based costing, has identiﬁed ﬁve activities (and related cost drivers).Each activity, its budgeted cost, and related cost driver is identiﬁed below.  The following information pertains to the three product lines for next year:  What is Barnett's pool rate for the automated machinery activity?
A)$24.00 per machine hour. 
B)$24.50 per labor hour. 
C)$49.42 per unit. 
D)$50.00 per machine hour. 
E)None of the answers is correct.

Quizplus · Accepted Answer

To find the pool rate for the automated machinery activity, we need to divide the total budgeted cost for the activity by the total budgeted cost driver (machine hours).

Total budgeted cost for automated machinery activity = $192,000 
Total budgeted machine hours = 8,000

Pool rate for automated machinery activity = $192,000 ÷ 8,000 = $24.00 per machine hour.

Therefore, choice A is the correct answer.

Barnett Products Manufactures Three Types of Remote-Control Devices: Economy, Standard