Canton's Corp.manufactures two sizes of ceramic paperweights,regular and jumbo.The following information applies to their expectations for the planning period:

Expected direct costs amounts to $928,000 for the period.Support cost requirements of both products are substantially different from one another.Canton's uses an ABC costing system.
The inspections activity-cost driver rate is ________.
A)$0.44
B)$5.70
C)$6.20
D)$13.08

Question

Canton's Corp.manufactures two sizes of ceramic paperweights,regular and jumbo.The following information applies to their expectations for the planning period:

Expected direct costs amounts to $928,000 for the period.Support cost requirements of both products are substantially different from one another.Canton's uses an ABC costing system.
The inspections activity-cost driver rate is ________.
A)$0.44 
B)$5.70 
C)$6.20 
D)$13.08

Quizplus · Accepted Answer

Inspections activity-cost driver rate = $135,780 ÷ 21,900 inspections = $6.20 per inspection