Assuming Activity-Cost Pools Are Used, What Are the Activity-Cost Driver

question 84

Multiple Choice

Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and inspections cost pools?

• A) $300 per change, $80 per setup, $2.50 per inspection
• B) $250 per change, $80 per setup, $3.75 per inspection
• C) $210 per change, $2.50 per setup, $26.25 per inspection
• D) $300 per change, $125 per setup, $4.00 per inspection

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Definitions:

Implicit Costs

The opportunity costs of utilizing resources owned by the firm that could have been employed for other purposes.

Explicit Costs

Direct, out-of-pocket payments for resources employed in the production of goods or services, easily identified and measured.

Capital Intensive

A description of industries or businesses that require large amounts of capital investment compared to labor.

Alternative Technologies

Various methods or means of producing goods or services that differ from current practices, often to improve efficiency or sustainability.