Calculating the activity rate is similar to the calculation of the
A)Activity pools.
B)Predetermined overhead rate.
C)Overhead leverage rate.
D)Contribution margin rate.

Question

Quizplus · Accepted Answer

The calculation of the activity rate is similar to the calculation of the predetermined overhead rate, as both involve dividing the estimated indirect costs by an estimated or actual allocation base. Activity rate is used to allocate overhead costs to products or services based on the level of activity they consume, while predetermined overhead rate is used to apply overhead costs to products or services based on a predetermined rate per unit of allocation base. Therefore, choice B is the best option.

Calculating the Activity Rate Is Similar to the Calculation of the