Bachrodt Corporation Uses Activity-Based Costing to Compute Product Margins

question 153

Multiple Choice

Bachrodt Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools--Processing, Supervising, and Other. The costs in those activity cost pools appear below: Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below
Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins.
The activity rate for the Processing activity cost pool under activity-based costing is closest to:

• A) $2.10 per MH
• B) $2.16 per MH
• C) $3.60 per MH
• D) $1.50 per MH

---

Definitions:

Full Information

A situation or condition where all relevant data and knowledge is available to all participants in a decision-making process.

Nash Equilibrium Strategies

Nash Equilibrium Strategies refer to a situation in a game where no player can benefit by changing their strategy while the other players keep theirs unchanged.

Big Ten Football Coach

A head coach responsible for leading a football team within the Big Ten Conference, an NCAA Division I collegiate athletic conference in the United States.

Run the Ball

A sports strategy, particularly in football (soccer or American football), where the ball is advanced towards the goal or down the field by running with it instead of passing.