Given the following information, determine the activity rate for setups. Budgeted Activity Activity Setups Inspections Assembly (dlh) Oa. $5.65 Ob. $6.37 Oc. $5.78 Od. $5.74 Total Activity-Base Usage 10,000 25,400 70,700 Cost $63,700 $143,500 $406,100

Given the following information, determine the activity rate for setups. Budgeted Activity Activity Setups Inspections Assembly (dlh) Oa. $5.65 Ob. $6.37 Oc. $5.78 Od. $5.74 Total Activity-Base Usage 10,000 25,400 70,700 Cost $63,700 $143,500 $406,100

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.

Question

Given the following information, determine the activity rate for setups.
Budgeted Activity
Activity
Setups
Inspections
Assembly
(dlh)
Oa. $5.65
Ob. $6.37
Oc. $5.78
Od. $5.74
Total Activity-Base
Usage
10,000
25,400
70,700
Cost
$63,700
$143,500
$406,100

Expert Solution

Introduction:

Budgeted activity cost is the total cost budgeted/ estimated for the particular activity.

Total activity-Base Usage is the cost drivers. It is used for calculating the activity rate.

The working is shown below:

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