A company identified the following partial list of activities,costs,and activity drivers expected for the next year:

-Calculate activity rates for each of the three activities using activity-based costing (ABC).
A)Extrusion: $304 per batch; handling: $32 per unit; packaging: $0.03 per unit.
B)Extrusion: $88 per batch; handling: $32 per order; packaging: $0.03 per unit.
C)Extrusion: $88 per order; handling: $32 per unit; packaging: $0.03 per batch.
D)Extrusion: $418 per batch; handling: $117.33 per order; packaging: $0.054 per unit.
E)Extrusion: $118.13 per batch; handling: $44 per order; packaging: $0.0675 per unit.

Question

A company identified the following partial list of activities,costs,and activity drivers expected for the next year:

-Calculate activity rates for each of the three activities using activity-based costing (ABC).
A)Extrusion: $304 per batch; handling: $32 per unit; packaging: $0.03 per unit. 
B)Extrusion: $88 per batch; handling: $32 per order; packaging: $0.03 per unit. 
C)Extrusion: $88 per order; handling: $32 per unit; packaging: $0.03 per batch. 
D)Extrusion: $418 per batch; handling: $117.33 per order; packaging: $0.054 per unit. 
E)Extrusion: $118.13 per batch; handling: $44 per order; packaging: $0.0675 per unit.

Quizplus · Accepted Answer

Activity-based costing assigns costs to activities based on their use of resources. The correct rates are: Extrusion at $88 per batch, handling at $32 per order, and packaging at $0.03 per unit.

A Company Identified the Following Partial List of Activities,costs,and Activity