Strama, Inc., manufactures and sells two products: Product A6 and Product 15. The company has an activity- based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Activity Cost Pools Activity Measures Estimated Overhead Cost ($) Product A6 Product 15 Total Labor-related DLHS $187,632 9,300 4,900 14,200 Production orders Orders $39,125 2,350 2,750 5,100 Order size MHs $175,140 7,600 7,800 15,400 $401,897 The activity rate for the Order Size activity cost pool under activity-based costing is: A. $29.58 per MH B. $15.10 per MH C. $11.37 per MH D. $19.30 per MH

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Chapter6: Activity-based, Variable, And Absorption Costing
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The order size activity cost pool under activity based costing

Strama, Inc., manufactures and sells two products: Product A6 and Product 15. The company has an activity-
based costing system with the following activity cost pools, activity measures, and expected activity:
Expected Activity
Activity Cost Pools Activity Measures Estimated Overhead Cost ($)
Product A6 Product 15 Total
Labor-related
DLHS
$187,632
9,300
4,900
14,200
Production orders Orders
$39,125
2,350
2,750
5,100
Order size
MHs
$175,140
7,600
7,800
15,400
$401,897
The activity rate for the Order Size activity cost pool under activity-based costing is:
A. $29.58 per MH
B. $15.10 per MH
C. $11.37 per MH
D. $19.30 per MH
Transcribed Image Text:Strama, Inc., manufactures and sells two products: Product A6 and Product 15. The company has an activity- based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Activity Cost Pools Activity Measures Estimated Overhead Cost ($) Product A6 Product 15 Total Labor-related DLHS $187,632 9,300 4,900 14,200 Production orders Orders $39,125 2,350 2,750 5,100 Order size MHs $175,140 7,600 7,800 15,400 $401,897 The activity rate for the Order Size activity cost pool under activity-based costing is: A. $29.58 per MH B. $15.10 per MH C. $11.37 per MH D. $19.30 per MH
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