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Question
A company identified the following partial list of activities, costs, and activity drivers expected for the next year:| Activity | Expected Costs | Cost Driver |
| Extrusion costs | $83,600 | Number batches made |
| Handling costs | $8,800 | Number of orders filled |
| Packaging costs | $40,500 | Number of units made |
| Product A | Product B | |
| Production volume | 750,000 units | 600,000 units |
| Batches made | 200 batches | 750 batches |
| Orders filled | 75 | 200 |
Calculate activity rates for each of the three activities using activity-based costing (ABC).
A. Extrusion: $304 per batch; handling: $32 per unit; packaging: $.03 per unit.
B. Extrusion: $88 per batch; handling: $32 per order; packaging: $.03 per unit.
C. Extrusion: $88 per order; handling: $32 per unit; packaging: $.03 per batch.
D. Extrusion: $418 per batch; handling: $117.33 per order; packaging: $.054 per unit.
E. Extrusion: $118.13 per batch; handling: $44 per order; packaging: $.0675 per unit.
Answer
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