Potter & Weasley Company had the following activities,estimated indirect activity costs,and allocation bases:
Potter & Weasley uses activity based costing.
The above activities are used by Departments P and Q as follows:
What is the cost per driver unit for the correspondence activity?
Definitions:
Utilization Rate
The percentage of capacity or capability that is being used effectively at a given time.
Poisson Distribution
A probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space, assuming these events happen with a known constant rate and independently of the time since the last event.
Service Rate
The speed at which a service provider can complete work or deliver services, often measured in customers served per unit of time or tasks completed per day.
Arrival Rate
The frequency at which entities (such as customers, materials, or information) reach a system or service point, often measured in entities per time unit.
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