Accola Company Uses Activity-Based Costing $\quad$ $\quad$ $\quad$

question 82

Multiple Choice

Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,100 units and of Product B is 700 units. The direct production costs (material and labour) for Product A are $110,600 and for B is $70,000. There are three activity cost pools for overhead, with estimated costs and expected activity as follows:
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Expected Activity }$
$\begin{array}{|l|r|r|r|r|}\hline\begin{array}{l}\text { Activity Cost } \\\text { Pool }\end{array} & \text { Estimated Cost } & \text { Product A } & \text { Product B } & \text { Total } \\\hline \text { Activity 1 } & \$ 18,270 & 600 & 500 & 1,100 \\\hline \text { Activity 2 } & 35,891 & 1,600 & 300 & 1,900 \\\hline \text { Activity 3 } & 48,796 & 440 & 420 & 860 \\\hline\end{array}$

-The activity rate for Activity 3 is closest to which of the following?

• A) $26.67.
• B) $56.74.
• C) $116.18.
• D) $119.72.

---

Definitions:

Situational Variables

Factors or conditions present in the environment that can influence the outcome of a decision or action.

Leadership Behavior

The actions and conduct displayed by leaders, influencing the direction, efficiency, and performance of their teams or organizations.

Cross-cultural Research

is the examination of cultural differences and similarities, aiming to understand how diverse cultural contexts influence human behavior and societal structures.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, breaking down geographical and economic barriers.