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What would the activity cost allocation rate be for mixing

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Reference no: EM132815614

Problem - Gwynnie Pie Company makes dessert pies for national fast food chains. Gwynnie Pie Company is considering using ABC costing and has the following activity cost pools and information available:

Activities

Estimated Overhead Costs

Estimated Activity

Material handling measured by batches

$250,000

2,500 batches

Mixing measured by batches

$112,000

2,500 batches

Packaging measured by units

$75,000

2,500,000 units

Maintenance measured by # of setups

$15,000

260 setups

Gwynnie Pie Company currently uses a plantwide overhead rate based on total estimated machine hours of 100,000 hours.

Based on the above information, what would the activity cost allocation rate be for mixing?

a. $44.8 per batch

b. $0.03 per unit

c. $4.52 per machine hour

d. $100 per batch

Reference no: EM132815614

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