Miramar Industries Manufactures Two Products, a and B

Multiple Choice

Miramar Industries manufactures two products, A and B. The manufacturing operation involves three overhead activities - production setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities: Each product's total activity in each of the three areas are as follows:

0 What is the activity rate for Material Handling?

A) $1.50 per part
B) $3.75 per part
C) $7.50 per part
D) $2.50 per part