Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product Z1 Product Z8 Total Labor-related DLHs $ 112,190 600 2,000 2,600 Machine setups setups 40,440 500 700 1,200 Order size MHs 609,770 3,000 3,200 6,200 $ 762,400 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: Multiple Choice $56.10 per MH $293.23 per MH $76.24 per MH $98.35 per MH
Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product Z1 Product Z8 Total Labor-related DLHs $ 112,190 600 2,000 2,600 Machine setups setups 40,440 500 700 1,200 Order size MHs 609,770 3,000 3,200 6,200 $ 762,400 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: Multiple Choice $56.10 per MH $293.23 per MH $76.24 per MH $98.35 per MH
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
| Estimated | Expected Activity | |||||
| Activity Cost Pools | Activity Measures | Product Z1 | Product Z8 | Total | ||
| Labor-related | DLHs | $ | 112,190 | 600 | 2,000 | 2,600 |
| Machine setups | setups | 40,440 | 500 | 700 | 1,200 | |
| Order size | MHs | 609,770 | 3,000 | 3,200 | 6,200 | |
| $ | 762,400 | |||||
The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
Multiple Choice
-
$56.10 per MH
-
$293.23 per MH
-
$76.24 per MH
-
$98.35 per MH
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