Which of the following describes how, in ABC, the activity allocation rate is computed?
A) The total estimated activity cost pool is divided by the total estimated activity allocation base.
B) The total estimated activity allocation base is divided by the total estimated activity cost pool.
C) The total estimated activity allocation base is multiplied by the total estimated activity cost pool.
D) You take the total estimated activity allocation base and subtract the total estimated total activity cost pool.

Question

Quizplus · Accepted Answer

The activity allocation rate is computed by dividing the total estimated activity cost pool by the total estimated activity allocation base. This gives the cost per unit of the activity allocation base, which can then be used to allocate costs to specific products or services based on the amount of the allocation base they use.

Which of the Following Describes How, in ABC, the Activity