Dercole Corporation Uses Activity-Based Costing to Assign Overhead Costs to Products

Multiple Choice

Dercole Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as follows: Machining, $43,200; Order Filling, $13,900; and Other, $14,900. Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: The activity rate for the Machining activity cost pool under activity-based costing is closest to:

A) $7.20 per MH
B) $4.02 per MH
C) $5.00 per MH
D) $4.32 per MH