Asked by Connor Covert on Apr 28, 2024

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Activity rates are computed by dividing the cost budgeted for each activity pool by the estimated activity base for that pool.

Activity Rates

The estimated activity cost divided by estimated activity-base usage.

Cost Budgeted

An estimate of costs for a project or business over a specific period, forming the basis for financial planning and performance measurement.

Activity Pool

A way to assign costs in cost accounting, grouping all the cost inputs associated with a specific activity.

  • Understand the fundamentals of activity-based costing and how activity rates are computed.
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Zybrea KnightMay 04, 2024
Final Answer :
True
Explanation :
Activity rates are calculated by dividing the total cost allocated to an activity cost pool by its total activity measure (estimated activity base), allowing for the allocation of costs to products or services based on their use of each activity.