Miramar Industries manufactures two products, A and B. The manufacturing operation involves three overhead activities - production setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities:
Each product's total activity in each of the three areas are as follows:
What is the activity rate for Production Setup?
A) $2,500 per setup
B) $833 per setup
C) $625 per setup
D) $400 per setup

Question

Miramar Industries manufactures two products, A and B. The manufacturing operation involves three overhead activities - production setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities: 
 Each product's total activity in each of the three areas are as follows:
 What is the activity rate for Production Setup?
A) $2,500 per setup 
B) $833 per setup 
C) $625 per setup 
D) $400 per setup

Quizplus · Accepted Answer

The Answer of Miramar Industries manufactures two products, A and B. The manufacturing operation involves three overhead activities - production setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities: 
 Each product's total activity in each of the three areas are as follows:
 What is the activity rate for Production Setup?
A) $2,500 per setup 
B) $833 per setup 
C) $625 per setup 
D) $400 per setup

Miramar Industries Manufactures Two Products, a and B