Paul Company Has Two Products: a and B The Activity Rate Under the Activity-Based Costing System for Activity

question 16

Multiple Choice

Paul Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows: $$\begin{array} { | l | l | l | l | l | } \hline \text { Activity } & \text { Estimated } & { \text { Expected Activity } } \\\hline \text { Cost Pool } & \text { Cost } & \text { Product A } & \text { Product B } & \text { Total } \\\hline \text { Activity } 1 & \$ 22,000 & 400 & 100 & 500 \\\hline \text { Activity } 2 & \$ 16,240 & 380 & 200 & 580 \\\hline \text { Activity } 3 & \$ 14,600 & 500 & 250 & 750 \\\hline\end{array}$$ The activity rate under the activity-based costing system for Activity 3 is closest to:

• A)$28.87.
• B)$58.40.
• C)$19.47.
• D)$70.45.

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Definitions:

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