Reference: 05-10
Austad Corporation Uses Activity-Based Costing to Determine Product

question 14

Multiple Choice

Reference: 05-10
Austad Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system: $$\begin{array}{l}\begin{array} { | l | l | } \hline \text { Activity Cost Pools (and Activity Measures) } & \begin{array} { l } \text { Estimated } \\\text { Overhead Cost }\end{array} \\\hline \text { Machine related (machine-hours) } & \$ 67,500 \\\hline \text { Batch setup (setups) } & \$ 273,700 \\\hline \text { General factory (direct labour-hours) } & \$ 204,000 \\\hline\end{array}\\\begin{array} { | l | l | l | l | } \hline & & { \text { Expected Activity } } \\\hline \text { Activity Cost Pools } & \text { Total } & \text { Product } X & \text { Product } Y \\\hline \text { Machine related } & 5,000 & 4,000 & 1,000 \\\hline \text { Batch setup } & 7,000 & 3,000 & 4,000 \\\hline \text { General factory } & 8,000 & 1,000 & 7,000 \\\hline\end{array}\end{array}$$
-The activity rate for the batch setup activity cost pool is closest to:

• A)$68.40.
• B)$39.10.
• C)$77.90.
• D)$91.20.

---

Definitions:

Mental Ability

The capacity to learn, reason, solve problems, and adapt to new situations, often assessed through intelligence testing.

Vocations

Occupations or careers especially regarded as a person's life's work or calling, influenced by their skills, interests, and passion.

Learning Disabilities

Neurologically-based processing problems that can interfere with learning basic skills such as reading, writing, or math, and can also hinder higher-level skills such as organization, time planning, abstract reasoning, long or short term memory, and attention.

Vocational Counseling

Guidance provided to individuals to help them choose, prepare for, and progress in their careers based on their interests, skills, and values.