The activity rate for each cost pool is
A)computed as Total activity driver volume ÷ Total activity cost pool resources.
B)similar to the predetermined overhead rate calculation under traditional job order costing.
C)computed as part of the last step in the preparation of activity-based costing data.
D)similar to process costing.

Question

Quizplus · Accepted Answer

The activity rate for each cost pool in activity-based costing (ABC) is similar to the predetermined overhead rate calculation under traditional job order costing. Both involve allocating overhead costs based on some measure of activity.

The Activity Rate for Each Cost Pool Is