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Which statements is true regarding company activity rates

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Reference no: EM132556937

A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:

Budgeted Activity  Activity Cost Pool      Budgeted Cost      Product A      Product B     Product C

Activity 1                                                $76,000                6,600            9,600            20,600

Activity 2                                                  $51,000               7,600           15,600         8,600

Activity 3                                                  $94,000                3,100           1,600          2,225

Question 1: Which of the following statements is true regarding this company's activity rates?

Multiple Choice

Option 1: The activity rate under the activity-based costing system for Activity 2 is $17.24.

Option 2: The activity rate under the activity-based costing system for Activity 2 is $1.60.

Option 3: The activity rate under the activity-based costing system for Activity 2 is $13.57.

Option 4: The activity rate under the activity-based costing system for Activity 2 is $3.06.

Option 5: The activity rate under the activity-based costing system for Activity 2 is $2.07.

Reference no: EM132556937

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