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Huelskamp Corporation has provided the following data concerning its overhead costs for the coming year: The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year: The Other activity cost pool does not have a measure of activity; it is used to accumulate costs of idle capacity and organization-sustaining costs. The distribution of resource consumption across activity cost pools is given below: The activity rate for the Assembly activity cost pool is closest to:

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Answer:

$2.85 per labor hours

Explanation:

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Total Overhead = Wages + Depreciation + Rent

Total Overhead = (360,000*25%) + (120,000*15%) + (180,000*35%)

Total Overhead = $90,000 + $18,000 + $63,000

Total Overhead = $171,000

Activity rate = Total Overhead / Assembly

Activity rate = $171,000 / 60,000

Activity rate = $2.85 per labor hours

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