Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,500 units and of Product B is 900 units. There are three activity cost pools, with estimated costs and expected activity as follows:
Activities |
Estimated Overhead Cost |
Expected Activity |
Product A |
Product B |
Total |
Activity 1 |
$33,839 |
1,000 |
900 |
1,900 |
Activity 2 |
$53,703 |
2,000 |
700 |
2,700 |
Activity 3 |
$67,850 |
600 |
580 |
1,180 |
The activity rate for Activity 3 is closest to?