Recker Recreational Uses Activity-Based Costing Which of the Following Is the Rate for Activity 3

question 91

Multiple Choice

Recker Recreational uses activity-based costing. The company produces wooden playground equipment. It has two models manufactured in its Texas plant-swings and slides. The estimated costs and expected activity for each of the overhead activity pools follow: $\begin{array}{lllrl}\text { Activity } & \text { Estimated } &\text { Expected Activity }\\\text { Cost Pool } & \text { Cost }&(\text { Hard-Cover }&\text { Soft-Cover }&\text { Total }\\\hline\text { Activity } 1 & \$ 15,000 & 800 & 700 & 1,500 \\\text { Activity 2 } & \$ 14,900 & 500 & 1,500 & 2,000 \\\text { Activity 3 } & \$ 27,600 & 800 & 400 & 1,200\end{array}$ Which of the following is the rate for Activity 3 that will used to allocate costs to swings?

• A) $90
• B) $12,000
• C) $30
• D) There is not enough information provided to determine the answer.

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