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

question 25

Multiple Choice

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 in the following table: Which of the following statements is true regarding this company's activity rates?

• A) The activity rate under the activity-based costing system for Activity 2 is $2.00.
• B) The activity rate under the activity-based costing system for Activity 2 is $16.00.
• C) The activity rate under the activity-based costing system for Activity 2 is $1.50.
• D) The activity rate under the activity-based costing system for Activity 2 is $19.50.
• E) The activity rate under the activity-based costing system for Activity 2 is $2.81.

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