A&W Manufacturing Uses an Activity-Based Costing System for Its Cutting

Multiple Choice

A&W Manufacturing uses an activity-based costing system for its cutting department.The activity cost totals $148,000.The number of cuts is the cost driver.The cutting department processed a total of 9,000 batches with an average cuts per batch of 6 and total cuts of 46,250.What is the activity rate for the cutting department?

A) $1,500 per cut
B) $247 per cut
C) $16.45 per batch
D) $3.20 per cut