Hochberg Corporation Uses an Activity-Based Costing System with the Following

question 128

Multiple Choice

Hochberg Corporation uses an activity-based costing system with the following three activity cost pools: The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs: The distribution of resource consumption across activity cost pools is given below: The activity rate for the Fabrication activity cost pool is closest to:

• A)$5.30 per machine-hour
• B)$3.60 per machine-hour
• C)$7.20 per machine-hour
• D)$4.80 per machine-hour

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Definitions:

Form 941

A U.S. tax form used by employers to report quarterly federal payroll taxes.

Note Payable

A written promise to pay a specified amount of money, usually with interest, by a certain date, representing a liability.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, often shown on the income statement.

Face Value

The nominal or dollar value printed on a security or financial instrument, representing its legal value.