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Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other.

Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:

 

Overhead costs: Equipment expense$43,000Indirect labor$7,600

 

Distribution of Resource Consumption Across Activity Cost Pools:

 

 Activity Cost Pools ProcessingSupervisingOtherEquipment expense0.400.500.10Indirect labor0.400.500.10

 

Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:

 

Activity:

 

 MHs (Processing)Batches (Supervising)Product F612,9001,130Product X01,440750Total14,3401,880

 

The activity rate for the Supervising activity cost pool under activity-based costing is closest to:

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The activity rate for the Supervising... View the full answer

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