In Activity-Based Costing, the Activity Rate for an Activity Cost

question 210

Multiple Choice

In activity-based costing, the activity rate for an activity cost pool is computed by dividing the total overhead cost in the activity cost pool by:

• A) the direct labor-hours required by the product.
• B) the machine-hours required by the product.
• C) the total activity for the activity cost pool.
• D) the total direct labor-hours for the activity cost pool.

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Definitions:

Marginal Tax Rates

The rate of tax applied to the last dollar of income, which can vary depending on the income level and filing status of an individual or entity.

Straight-Line

A method of calculating depreciation of an asset, where its cost is evenly spread over its useful life.

After-Tax Lease Payment

Lease payments after accounting for taxes, reflecting the net cost to the lessee.