Reference: 05-03
Arthur Company Has Two Products: S and D

question 32

Multiple Choice

Reference: 05-03
Arthur Company has two products: S and D. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools: $$\begin{array} { | l | l | l | l | l | } \hline \text { Activity } & & { \text { Expected Activity } } \\\hline \text { Cost Pool } & \begin{array} { l } \text { Estimated Ovhd. } \\\text { Cost }\end{array} & \text { Product S } & \text { Product D } & \text { Total } \\\hline \text { Activity 1 } & \$ 20,000 & 100 & 400 & 500 \\\hline \text { Activity 2 } & \$ 14,600 & 500 & 250 & 750 \\\hline \text { Activity 3 } & \$ 90,000 & 300 & 2,700 & 3,000 \\\hline\end{array}$$ The annual production and sales of Product S is 4,547 units. The annual production and sales of Product D is
7,913.
-The activity rate under the activity-based costing system for Activity 3 is closest to:

• A)$33.33.
• B)$29.32.
• C)$30.00.
• D)$41.53.

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