Reference: 05-09
Aujla Corporation Uses Activity-Based Costing to Determine Product

Multiple Choice

Reference: 05-09
Aujla Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system: $$\begin{array}{l}\begin{array} { | l | l | } \hline \text { Activity Cost Pools (and Activity Measures) } & \text { Estimated Overhead Cost } \\\hline \text { Machine related (machine-hours) } & \$ 239,000 \\\hline \text { Batch setup (setups) } & \$ 234,900 \\\hline \text { General factory (direct labour-hours) } & \$ 159,300 \\\hline\end{array}\\\begin{array} { | l | l | l | l | } \hline & & \text { Expected Activity } & \\\hline \begin{array} { l } \text { Activity Cost } \\\text { Pools }\end{array} & \text { Total } & \text { Product X } & \text { Product Y } \\\hline \text { Machine related } & 10,000 & 4,000 & \\\hline \text { Batch setup } & 9,000 & 8,000 & 6,000 \\\hline \text { General factory } & 9,000 & 3,000 & 1,000 \\\hline\end{array}\end{array}$$
-The activity rate for the batch setup activity cost pool is closest to:

A) $29.40.
B) $70.40.
C) $26.10.
D) $234.90.