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Provenzano Corporation manufactures two products: Product B56Z and Product D32N. The company is considering implementing...

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Accounting

Provenzano Corporation manufactures two products: Product B56Z and Product D32N. The company is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products B56Z and D32N.

Activity Cost Pool Activity Measure Total Cost Total Activity
Machining Machine-hours $330,000 15,000 MHs
Machine setups Number of setups $ 50,000 100 setups
Product design Number of products $ 88,000 2 products
Order size Direct labor-hours $280,000 10,000 DLHs
Activity Measure Product B56Z Product D32N
Machine-hours 6,000 9,000
Number of setups 80 20
Number of products 1 1
Direct labor-hours 6,000 4,000

What is the activity rate for the Machine Setups activity cost pool?

Multiple Choice

$625.00 per setup

$500.00 per setup

$3.33 per setup

Answer & Explanation Solved by verified expert
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