Marton Corporation has provided the following data from its activity-based costing accounting system:
The activity rate for the "designing products" activity cost pool is closest to:
A) $124 per product design hour
B) $181 per product design hour
C) $55 per product design hour
D) $1,526,916 per product design hour

Question

Marton Corporation has provided the following data from its activity-based costing accounting system: 
The activity rate for the "designing products" activity cost pool is closest to:
A) $124 per product design hour 
B) $181 per product design hour 
C) $55 per product design hour 
D) $1,526,916 per product design hour

Quizplus · Accepted Answer

To calculate the activity rate, we divide the total cost of the activity cost pool by its total activity measure. For the "designing products" activity cost pool, the total cost is $2,162,500 and the total activity measure is 12,000 hours. Therefore, the activity rate is:
$2,162,500 / 12,000 hours ≈ $181 per product design hour.

Marton Corporation Has Provided the Following Data from Its Activity-Based