Zee Corporation has provided the following data concerning its overhead costs for the coming year: The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year: The Other activity cost pool does not have a measure of activity;it is used to accumulate costs of idle capacity and organization-sustaining costs. The distribution of resource consumption across activity cost pools is given below: The activity rate for the Assembly activity cost pool is closest to:
A)$2.70 per labor-hour
B)$4.25 per labor-hour
C)$4.05 per labor-hour
D)$8.10 per labor-hour

Question

Zee Corporation has provided the following data concerning its overhead costs for the coming year:   The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year:  The Other activity cost pool does not have a measure of activity;it is used to accumulate costs of idle capacity and organization-sustaining costs. The distribution of resource consumption across activity cost pools is given below:  The activity rate for the Assembly activity cost pool is closest to:
A)$2.70 per labor-hour 
B)$4.25 per labor-hour 
C)$4.05 per labor-hour 
D)$8.10 per labor-hour

Quizplus · Accepted Answer

Allocations to the Assembly activity cost pool:
 11eaa48f_7b8c_1d2c_9e4a_ef28deb325b6_TB2485_00 Assembly: $85,000 F1F1F1S1F1F1F10 20,000 labor-hours = $4.25 per labor-hour

Zee Corporation Has Provided the Following Data Concerning Its Overhead