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 below.
|
|
|
Budgeted Activity |
| Activity Cost Pool |
Budgeted Cost |
Product A |
Product B |
Product C |
| Activity 1 |
$104,720 |
6,800 |
9,800 |
20,800 |
| Activity 2 |
$74,520 |
7,800 |
15,800 |
8,800 |
| Activity 3 |
$126,000 |
3,300 |
1,800 |
2,400 |
Which of the following statements is true regarding this company's activity rates?
|
The activity rate under the activity-based costing system for Activity 2 is $2.80. |
|
The activity rate under the activity-based costing system for Activity 2 is $16.80. |
|
The activity rate under the activity-based costing system for Activity 2 is $2.30. |
|
The activity rate under the activity-based costing system for Activity 2 is $21.90. |
|
The activity rate under the activity-based costing system for Activity 2 is $3.95. |