Question

Sukhu Corporation's activity-based costing system has three activity cost pools--Fabricating, Setting Up, and other. The company's overhead costs have already been allocated to these cost pools as follows: Fabricating Setting Up Other $13,800 $39,900 $20,300 Costs in the Fabricating cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. The following table shows the machine-hours and number of batches associated with each of the company's two products: Product MO Product P9 MHS 9,500 4,500 14,000 Batches 1,300 1,700 3,000 Total Required: Calculate activity rates for each activity cost pool using activity-based costing. (Round your answers to 2 decimal places.) Activity Cost Pools Fabricating Setting up Activity Rate per MH per batch

Answer 1

Answer with working is given below

Activity rate = Activity Cost pool/ Total Activities

Activity rate Activity Cost Pools Fabricating Setting up $0.99 per MH $13.30 per batch Working note Activity А ТВ Total Cost pool activities $13,800 14,000 $39,900 3,000 A/B Activity Rate $0.99 per MH $13.30 per batch Fabricating Setting up