Question

Given the following information, determine the activity rate for setups. Activity Total Activity-Base Usage Budgeted Activity Cost Setups 10,000 $180,000 Inspections 24,000 $120,000 Assembly (dlh) 80,000 $400,000 a.$58.00 b.$18.00 c.$5.09 d.$0.75

Answer 1

Answer:

b.$18.00

Explanation:

The rate of activity can be estimated by using the total number of activity and the cost incurred. This is normally used to show the progress of the specific activity and it can either positive or negative. In this problem, the activity rate of setups is equivalent to $180000/10000 = $18. Therefore, the correct answer is option b.

Answer 2

Answer:

Activity Rate for Setup = $18

Explanation:

Given

Activity Total Activity-Base Usage Budgeted Activity Cost

Setups 10,000 $180,000

Inspections 24,000 $120,000

Assembly (dlh) 80,000 $400,000

Activity Rate is calculated by: Budget Activity Cost/Activity Base Usage

Where Activity Base (for Setup) = 10,000

Budget Activity Cost = $180,000

So, Activity Rate for Setup = $180,000/10,000

Activity Rate for Setup = $18

Hence, the calculated activity Rate for setups is $18