A Company Uses Activity-Based Costing to Determine the Costs of Its

question 147

Essay

A company uses activity-based costing to determine the costs of its three products: A,B,and C.The budgeted cost and activity for each of the company's three activity cost pools are shown below.

Compute the company's activity rates under activity-based costing for each of the three activities.

---

Definitions:

Units

A measurement of quantity, used in various contexts to indicate the amount, volume, or number of items or elements.

Spending Variance

The variance between the anticipated budget for an expense and the actual expenditure.

Direct Materials

Raw materials that are directly used in the manufacturing of a product and are easily traceable to that product.

Client-Visits

The number of times clients or customers physically visit a business or service location, often used as a metric in service-based industries.