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Knowledge Check 01 When manufacturing overhead is applied to each unit of product B, what is the activity rate that will be used for the setting up machines (setup) activity cost pool

Answer :

ABIOLATAIWO2015GO

The activity rate that will be used for the setting up machines (setup) activity cost pool is $223.00 per setup.

Activity rate

Using this formula

Activity rate=Setting up machines (setups)/Activity Setups

Where:

Setting up machines (setups)=$551,702

Activity Setups=2,474 setups

Let plug in the formula

Activity rate=$551,702 ÷ 2,474 setups

Activity rat = $223.00 per setup

Inconclusion the activity rate that will be used for the setting up machines (setup) activity cost pool is $223.00 per setup.

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