Stroth Corporation Uses Activity-Based Costing to Compute Product Margins

Multiple Choice

Stroth Corporation uses activity-based costing to compute product margins.Overhead costs have already been allocated to the company's three activity cost pools-Machining, Order Filling, and Other.The costs in those activity cost pools appear below: 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: Finally, sales and direct cost data are combined with Machining and Order Filling costs to determine product margins. The activity rate for Machining under activity-based costing is closest to:

A) $0.54 per MH
B) $4.00 per MH
C) $0.34 per MH
D) $2.10 per MH