Library Resources Company uses activity-based costing. The company produces soft and hard-cover books. The estimated costs and expected activity for each of the activity pools follow:
|
Activity
|
Estimated
|
Expected Activity
|
|
|
Cost Pool
|
Cost
|
Hard-Cover
|
Soft-Cover
|
Total
|
|
Activity 1
|
$15,675
|
800
|
300
|
1,100
|
|
Activity 2
|
$11,900
|
500
|
200
|
700
|
|
Activity 3
|
$36,000
|
800
|
400
|
1,200
|
To which of the following is the rate for activity 3 that will used to apply costs to Soft-cover books closest?
a) $90.00
b) $12,000
c) $30.00
d) Not enough information is provided.