Question

Vanvalkenburg, Inc., manufactures and sells two products: Product Q5 and Product JO. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Overhead Activity Cost Pools Measures Cost Product 25 Product JO Total Labor-related DLHS $191,748 3,000 2,800 5,800 Production orders orders 70,536 300 500 800 Order size MHS 295, 592 4,300 4,500 8,800 $557,876 The activity rate for the Production Orders activity cost pool under activity-based costing is closest to: Multiple Choice O $63.40 per order O $69.74 per order O $88.17 per order o oo $65.69 per order

Answer 1

Estimated overhead cost for production orders	70536
Divide by Total Production orders	800
Activity rate for the Production orders activity	88.17	per order
Option C $88.17 per order is correct