The activity rate for the Production Orders activity cost pool under activity-based costing is closest to:
A)$176.22 per order
B)$61.79 per order
C)$172.70 per order
D)$106.87 per order

Question

Quizplus · Accepted Answer

The activity rate for the Production Orders activity cost pool can be calculated by dividing the total cost of the pool ($368,950) by the total number of orders (5,961). This gives us an activity rate of $61.79 per order. Therefore, option B is the closest choice. Activity rate = Estimated overhead cost ÷ Total expected activity
= $43,253 ÷ 700 orders = $61.79 per order

The Activity Rate for the Production Orders Activity Cost Pool