Millner 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) $101 per product design hour
B) $1,372,448 per product design hour
C) $176 per product design hour
D) $57 per product design hour

Question

Millner 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) $101 per product design hour 
B) $1,372,448 per product design hour 
C) $176 per product design hour 
D) $57 per product design hour

Quizplus · Accepted Answer

Activity rate = Total cost of activity pool ÷ Total activity driver
Total cost of designing products activity pool = $1,056,500
Total activity driver for designing products = 6,000 product design hours
Activity rate = $1,056,500 ÷ 6,000 = $176 per product design hour. Option C is the closest to this value.

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