Monson Company has two products: G and P. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools:   Activity   Expected Activity Cost Pool Estimated Ovhd. Cost Product G Product P Total Activity 1 $30,000 200 400 600 Activity 2 $24,000 600 900 1,500 Activity 3 $80,000 400 3,600 4,000 The annual production and sales of Product G is 10,640 units. The annual production and sales of Product P is 26,600. The activity rate under the activity-based costing system for Activity 2 is closest to:   $21.97.   $89.33.   $16.00.   $26.67.

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 37P: Refer to the data given in Problem 4.36 and suppose that the expected activity costs are reported as...
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13. 

Monson Company has two products: G and P. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools:
 

Activity   Expected Activity
Cost Pool Estimated Ovhd. Cost Product G Product P Total
Activity 1 $30,000 200 400 600
Activity 2 $24,000 600 900 1,500
Activity 3 $80,000 400 3,600 4,000


The annual production and sales of Product G is 10,640 units. The annual production and sales of Product P is 26,600.

The activity rate under the activity-based costing system for Activity 2 is closest to:

 

  • $21.97.
  •  
    $89.33.
  •  
    $16.00.
  •  
    $26.67.
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