Strama, Inc., manufactures and sells two products: Product A6 and Product Is. 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 Is Total Labor-related Production orders Order size DLHs Orders MHs $187,682 $39,125 $175,140 9,300 2,350 7,600 4,900 2,750 7,800 14,200 5,100 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. $11.87 per MH D. $19.80 per MH

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
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Problem 4P: Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2....
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Strama, Inc., manufactures and sells two products: Product A6 and Product Is. 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 Is Total
Labor-related
Production orders
Order size
DLHs
Orders
MHs
$187,682
$39,125
$175,140
9,300
2,350
7,600
4,900
2,750
7,800
14,200
5,100
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. $11.87 per MH
D. $19.80 per MH
Transcribed Image Text:Strama, Inc., manufactures and sells two products: Product A6 and Product Is. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Activity Cost Pools Activity Measures Estimated Overhead Cost ($) Product A6 Product Is Total Labor-related Production orders Order size DLHs Orders MHs $187,682 $39,125 $175,140 9,300 2,350 7,600 4,900 2,750 7,800 14,200 5,100 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. $11.87 per MH D. $19.80 per MH
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