The activity rate for the Production Orders activity cost pool under activity-based costing is closest to:

A) $176.22 per order
B) $61.79 per order
C) $172.70 per order
D) $106.87 per order

Question

The activity rate for the Production Orders activity cost pool under activity-based costing is closest to:A) $176.22 per orderB) $61.79 per orderC) $172.70 per orderD) $106.87 per order

Emily Arizpe · Accepted Answer

Final Answer : B, Explanation :  The activity rate for the Production Orders activity cost pool can be calculated by dividing the total cost of the pool ($368,950) by the total number of orders (5,961). This gives us an activity rate of $61.79 per order. Therefore, option B is the closest choice. Activity rate = Estimated overhead cost ÷ Total expected activity= $43,253 ÷ 700 orders = $61.79 per order

The activity rate for the Production Orders activity cost pool under activity-based costing is closest to:

A) $176.22 per order
B) $61.79 per order
C) $172.70 per order
D) $106.87 per order

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