Fargo Corporation Uses an Activity-Based Costing System with Three Activity

question 27

Multiple Choice

Fargo Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs: The distribution of resource consumption across the three activity cost pools is given below:
If the company chooses machine hours as its cost driver for the fabrication cost pool, and there were 22,000 machine hours in the year, the cost per machine hour for fabrication is closest to?

• A) $7.41
• B) $7.32
• C) $8.14
• D) $7.53

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