The Activity Rate for the General Factory Activity Cost Pool

question 175

Multiple Choice

The activity rate for the General Factory activity cost pool under activity-based costing is closest to:

• A)$36.23 per MH
• B)$68.48 per MH
• C)$96.19 per MH
• D)$33.59 per MH

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Definitions:

Law of Demand

An economic principle stating that the quantity demanded of a good decreases as its price increases, all else being equal, and vice versa.

Diminishing Marginal Utility

Diminishing marginal utility is the principle stating that as a person consumes more of a good, the satisfaction gained from consuming each additional unit decreases.

Income Effect

Refers to the change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.

Substitution Effect

The change in consumption patterns due to a change in the prices of goods, leading consumers to replace more expensive items with cheaper alternatives.