Using the following information, determine the activity rate for the purchasing activity. Activity Estimated Activity Cost Estimated Activity-Base Usage Setup $80,000 1,000 Purchasing 130,000 10,000 Inspecting 50,000 2,000 a.$2.00 b.$8.00 c.$130.00 d.$13.00

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Using the following information, determine the activity rate for the purchasing activity.

Activity Estimated Activity Cost Estimated Activity-Base Usage
Setup $80,000 1,000
Purchasing 130,000 10,000
Inspecting 50,000 2,000
a.$2.00
b.$8.00
c.$130.00
d.$13.00 
Expert Solution
Introduction:

Under activity based costing, cost are calculated for each activity based on their consumption or usage. The activity rate is based on the activity base of that activity.

The question requires the activity rate for the purchasing activity.

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