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

question 9

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: $\begin{array}{lllll}\text { Activity } & \text {Estimated }&&\text { Expected Activity }\\\text { Cost Pool } & \text { Cost } & \text { Swings } & \text { Slides }&\text { Total }\\\hline\text { Activity } 1 & \$ 15,675 & 800 & 300 & 1,100 \\\text { Activity } 2 & \$ 11,900 & 500 & 200 & 700 \\\text { Activity } 3 & \$ 36,000 & 800 & 400 & 1,200\end{array}$ 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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Definitions:

Movie Rental

The practice of paying a fee to borrow a film for a limited period, traditionally through physical stores, or digitally via online platforms.

Choice Set

The collection of all possible options available to a consumer when making a decision.

Price Decreases

A reduction in the selling price of goods or services.

Marginal Utility

The extra gratification or benefit received from using an additional unit of a product or service.