Given the Following Information, Determine the Activity Rate for Setups

question 106

Multiple Choice

Given the following information, determine the activity rate for setups. $$\begin{array} { | l | c | c | } \hline \text { Activity Pool } & \text { Activity Base } & \text { Budgeted Amount } \\\hline \text { Setups } & 10,000 & \$ 180,000 \\\hline \text { Inspections } & 24,000 & \$ 120,000 \\\hline \text { Assembly DLH) } & 80,000 & \$ 400,000 \\\hline\end{array}$$

• A) $58.00
• B) $18.00
• C) $0.75
• D) $5.09

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Definitions:

Unit Product Cost

The cost assigned to a single unit of product, encompassing all expenses directly and indirectly involved in its production.

Direct Labor Cost

The total cost of all the labor directly involved in the production of goods or services.

Net Operating Income

The income earned from the primary activities of a business, not including expenses from interest and taxes.

Absorption Costing

An accounting method that includes all manufacturing costs (variable and fixed) in the cost of a product.