Question: Assume a companys activity-based costing system includes three activities. The following information is available with respect to those activities: Activity Cost Pool Estimated Overhead Cost

Assume a companys activity-based costing system includes three activities. The following information is available with respect to those activities:

Activity Cost Pool Estimated Overhead Cost Expected Activity
Travel $ 136,000 100,000 miles driven
Deliveries $ 110,000 2,200 customer deliveries
Customer service $ 220,000 10,000 phone calls

What is the activity rate for the Travel activity?

Multiple Choice

  • $1.36 per mile drivenCorrect

  • $13.60 per mile driven

  • $0.14 per mile driven

  • $1.14 per mile driven

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