Answer: $2,180
Explanation:
Net income is already derived from revenue so adding revenue would be double counting.
Depreciation is a non cash expense so should be added back to cash holdings.
Negative changes in operating assets and liabilities reduces cash.
Acquisitions of Property and Plants reduces cash
Dividends also reduce cash
Increase in debt increases cash.
Cash balance is therefore:
= Beginning of year cash + Net income + Depreciation + Increase in long-term debt - Negative changes in operating assets and liabilities - Acquisitions of PP - Dividends paid in current year
= 1,600 + 450 + 100 + 500 - 60 - 300 - 110
= $2,180
Net income is derived from revenue so adding revenue give double counting
Depreciation is a non cash expense so should be added back to cash holdings
Negative changes in operating assets and liabilities reduces cash
Acquisitions of Property and Plants reduces cash
Dividends reduce cash
Increase in debt increases cash
Cash balance based on the information is:
= Beginning of year cash + Net income + Depreciation + Increase in long-term debt - Negative changes in operating assets and liabilities - Acquisitions of PP - Dividends paid in current year
= 1,600 + 450 + 100 + 500 - 60 - 300 - 110
= 2,180
What are Operating Assets?Operating assets are those assets acquired for use in the conduct of the ongoing operations of a business. This means assets that are needed to generate revenue.
Examples of operating assets are cash, prepaid expenses, accounts receivable, inventory, and fixed assets. If there are recognized intangible assets, such as technology licenses needed to manufacture goods, these should also be considered operating assets.
Assets not considered to be operating assets are those used for long-term investment purposes, such as marketable securities.
Assets no longer used for operations, such as assets held for sale, are also not considered to be operating assets.
Further, a non-cash asset that is held for investment purposes, such as an investment property, is not considered an operating asset.
What is Liability?A liability is something a person or company owes, usually a sum of money.
Liabilities are settled over time through the transfer of economic benefits including money, goods, or services.
Liability is Recorded on the right side of the balance sheet, liabilities include loans, accounts payable, mortgages, deferred revenues, bonds, warranties, and accrued expenses.
Liabilities can be contrasted with assets.
Liabilities refer to things that you owe or have borrowed; assets are things that you own or are owed.
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vai trò của đạo đức trong doanh nghiệp là gì
Explanation:
Đạo đức kinh doanh giúp doanh nghiệp duy trì mối quan hệ tốt hơn và hài hòa với xã hội, khách hàng, nhân viên và các ngành hữu quan. ... Đạo đức kinh doanh có một vai trò quan trọng trong việc nâng cao lợi nhuận và năng suất của doanh nghiệp và cải thiện thiện chí của doanh nghiệp trên thị trường.
đánh dấu tôi là não nhất làm ơn giúp tôi và cảm ơn
K Company estimates that overhead costs for the next year will be $3,441,000 for indirect labor and $930,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 93,000 direct labor hours are planned for this next year, how much overhead would be assigned to a product requiring 5 direct labor hours
Answer:
$235.00
Explanation:
Calculation to determine how much overhead would be assigned to a product requiring 5 direct labor hours
Overhead assigned to direct labor hours=[($3,441,000 + $930,000)/93000 direct labor hours]*5 direct labor hours
Overhead assigned to direct labor hours=($4,371,000/93,000)* 5 direct labor hours
Overhead assigned to direct labor hours= $47 per direct labor hour* 5 direct labor hours
Overhead assigned to direct labor hours= $235.00
Therefore how much overhead would be assigned to a product requiring 5 direct labor hours will be $235
Who are the primary regulatory entities of the real estate business?
Answer:
State regulation State governments are the primary regulatory entities of the real estate business. State governments establish real estate license laws and qualifications
Explanation:
A simple definition of real estate is that it is air, water, land, and everything
affixed to the land. Real estate in the United States may be owned privately by
individuals and private entities or publicly by government entities. Private
ownership rights in this country are not absolute. The government can impose
taxes and restrictions on private ownership rights, and it can take private
property away altogether. In addition, other private parties can exert their rights
and interests on one's real property. A bank, for example, can take a property if
the owner fails to pay a mortgage. A neighbor can claim the right to walk across
one's property whether the owner likes it or not, provided he or she has done so
for a certain number of years.
In attempting to define real estate, it is essential to understand what rights and
interests parties have in a parcel of real estate. And to understand real estate
rights and interests, one must first recognize the distinctions between:
land and real estate
real estate and property
real property and persnal pro[perty
Warren Co. recorded a right-of-use asset of $820,000 in a 10-year finance lease. The interest rate charged by the lessor was 10%. The balance in the right-of-use asset after two years will be:
Answer:
$656,000
Explanation:
Calculation to determine what The balance in the right-of-use asset after two years will be
Using this formula
Right-of-use asset after 2 years balance=Value of Asset- (Value of Asset*Used year)/Estimated Life
Let plug in the formula
Right-of-use asset after 2 years balance= $820,000 - ($820,000 / 10) * 2
Right-of-use asset after 2 years balance=$820,000-$164,000
Right-of-use asset after 2 years balance= $656,000
Therefore The balance in the right-of-use asset after two years will be:$656,000
True or false? if false explain. An internally held public debt is like a debt of the left hand owed to the right hand.
Answer:True
Explanation: AN internally held debt is like a debt of the left hand owned to the right hand. This is a true statement. Left hand and right hand is ib the same body. Similarly,internal debit is taken from public of one's own nation. Just like things are in left hand or right hand, it remains in same person. Similarly, internal debit is borrowed from the people of the nation itself and is held within the nation.
Garcia Co. issued bonds with detachable common stock warrants. Only the warrants had a known market value. Cash proceeds exceed the sum of the fair value of the warrants and the face amount of the bonds. This excess is reported as:
Answer:
Discount on bond payable
Explanation:
since in the question it is mentioned that the company has issued the common stock warrants also the cash proceeds is more than the sum of the fair value + face value
So we presume that the bond are to be sold at the discount
Therefore the excess should be reported as the discount on bond payable
Zell Company had sales of $1,800,000 and related cost of merchandise sold of $1,150,000 for its first year of operations ending December 31, 20Y3. Zell Company provides customers refunds and allowances for any damaged merchandise. At the end of the year, Zell Company estimates that customers will request refunds and allowances for 1.5% of sales. Assume that on February 3, 20Y4, Zell Company paid a customer a $5,000 cash refund for damaged merchandise. Required: (a) Journalize the adjusting entry on December 31, 20Y3, to record the expected customer refunds and allowances\.\* (b) Journalize the entry to record the cash refund\.\* *Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
Solution :
a). Date Description Debit($) Credit($)
31st Dec 20Y3 Sales 27,000
(1,800,000 x 1.5%)
Customer refunds payable 27,000
Estimated sales return 16,000
inventory
Cost of merchandise sold 16,000
b). Date Description Debit($) Credit($)
3 Feb, 20Y4 Customer refund payable 5000
Cash 5000
Merchandise inventory 3100
Estimated return inventory 3100
Heat Tough Inc. makes heat-proof copper cookware in the United States, and it is looking to distribute its products in Europe. Rather than build and maintain a manufacturing facility in the United Kingdom, the company decides to ship its products directly from its plant in Illinois. What type of entry mode is the company using
Answer: Exporting
Explanation:
Exporting is the cheapest method of entering another market because it does not involve the building or maintenance of any business in the new market and neither does it involve any profit sharing as all the profits go to the company exporting.
With exporting, a company just ships its products to the new market it wants to enter without establishing a presence. Companies there will then buy these goods and sell them. This is what Heat Tough Inc is doing so this must be exporting.
Midsouth Stitchery wants to improve their productivity. Their process yield is currently 91.56% based on 9816 yards of material. If they are going to improve their productivity to 92.10, how many yards of finished material will they have to produce from the same amount of material input
Answer:
9,040.54 yards
Explanation:
Input material amount I = 9,816 yards
Productivity P = 92.10%
Let Output Material amount be O
O = I * P
O = 9,816 yards * 0.9210
O = 9040.536
O = 9040.54 yards
So, the unit of yards they will have to produce from the same amount of material input is 9,040.54 yards
Marvin Industries owns a piece of equipment with a cost of $78,000 and accumulated depreciation of $51,000. The equipment is sold for $30,000 cash. The amount that should be reported as a cash inflow from investing activities is:
Explanation:
tu pregunta no tiene sentido y no entiendo ese idioma
What value does a gender analysis add to the study of the global political economy?
Gender analysis provides information that recognizes that gender, and its relationship with race, ethnicity, culture, class, age, disability, and/or other status, is important in understanding the different patterns of involvement, behaviour and activities that women and men have in economic, social and legal.The essay concludes that a gender analysis is fundamental to IPE because it demonstrates the centrality of the differential valorisation of the masculine and the feminine to the functioning of the global political economy, and thus creates opportunities for political activism and resistance.
Inacio Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory: Units in beginning work in process inventory 2,300 Materials costs $ 14,400 Conversion costs $ 6,500 Percent complete with respect to materials 75% Percent complete with respect to conversion 20% Units started into production during the month 11,000 Units transferred to the next department during the month 9,900 Materials costs added during the month $ 173,500 Conversion costs added during the month $ 243,500 Ending work in process inventory: Units in ending work in process inventory 3,400 Percent complete with respect to materials 90% Percent complete with respect to conversion 30% The cost per equivalent unit for materials for the month in the first processing department is closest to: Multiple Choice $12.21 $13.15 $11.90 $14.50
Answer:
Inacio Corporation
The cost per equivalent unit for materials for the month in the first processing department is closest to:
= $14.50
Explanation:
a) Data and Calculations:
Units Materials Conversion
Beginning work in process 2,300 $14,400 $6,500
Percentage of completion 75% 20%
Units started during the month 11,000
Total units available 13,300
Units transferred to the next 9,900 100% 100%
Ending work in process 3,400 90% 30%
Costs added during the month $173,500 $243,500
Equivalent units of production:
Units Materials Conversion
Units transferred to the next 9,900 9,900 (100%) 9,900 (100%)
Ending work in process 3,400 3,060 (90%) 1,020 (30%)
Equivalent units of production 12,960 10,920
Costs of production: Materials Conversion
Beginning work in process $14,400 $6,500
Costs added during the month 173,500 243,500
Total costs of production $187,900 $250,000
Cost per equivalent unit: Materials Conversion
Total costs of production $187,900 $250,000
Equivalent units of production 12,960 10,920
Cost per equivalent unit $14.50 $22.89
During the year, Hamlet Inc. paid $22,000 to have bond certificates printed and engraved, paid $120,000 in legal fees, paid $18,000 to a CPA for registration information, and paid $280,000 to an underwriter as a commission. What is the amount of bond issue costs
Answer:
the issuance cost of the amount of the bond is $440,000
Explanation:
The computation of the issuance cost of the amount of the bond is given below:
Bond Certificate printing cost $22,000
Legal fees paid $120,000
CPA registration $18,000
Underwriting Commission $280,000
Total Bond issue costs $440,000
Hence, the issuance cost of the amount of the bond is $440,000
What kind of business can you start without start up capital?
Answer:
Blog or Vlog
Explanation:
you can start a daily life Blog in social media.
A job order costing system does which of the following? Select one: A. Is used to determine period costs in a service company B. Is used to determine unit costs when products are manufactured in a continuous flow process C. Allocates manufacturing costs to individual jobs to determine unit costs D. Both A and B E. None of the above
Answer: C. Allocates manufacturing costs to individual jobs to determine unit costs
Explanation:
Job order costing is used to identify the cost of producing a single units of a good. It is usually used by small to medium scale companies who produce per good or by companies that specialize in the production of a custom goods and services.
Under job order costing, manufacturing costs are allocated to individual jobs in order to determine what the individual jobs cost so that an appropriate selling price can be given.
You have tickets to go to Jamaica over spring break. Just this week your best friend informs you that he (she) is getting married over spring break. Your friend would like you to stay back in the city and be the wedding attendant. The tickets to Jamaica are nonrefundable. Which of the following is a sunk cost relating to your decision of attending the wedding or going on the trip to Jamaica?
a. The cost of wedding gift.
b. The cost of the airline tickets to Jamaica.
c. The cost of the clothing you will have to buy/rent to be in the wedding.
d. The cost of the rent on your apartment for the month
You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $250,000. The truck falls into the MACRS three-year class, and it will be sold after three years for $50,000. Use of the truck will require an increase in NWC (spare parts inventory) of $5,000. The truck will have no effect on revenues, but it is expected to save the firm $80,000 per year in before-tax operating costs, mainly labor. The firm's marginal tax rate is 21 percent. What will the operating cash flow for this project be during year 3
Answer:
Please find the complete solution in the attachment file.
Explanation:
Please find the attachment table for the 3 years of cash flow:
A logical way to allocate building maintenance costs to departments would be based on: Select one: A. Machine hours B. Number of employees C. Labor hours D. Square feet of floor space
Answer: D. Square feet of floor space
Explanation:
The building maintenance cost should be based on a measure that takes into account the size of the building so that the maintenance cost can be apportioned based on how much space needs to be maintained.
The best measure to do so would therefore be the square feet of floor space. If maintenance cost is assigned per square feet, it would take into account how much expenses are being incurred to maintain the entire size of the building.
Construct an amortization schedule for the first three months and the final three months of payments for a 30-year, 7 percent mortgage in the amount of $90,000. What percentage of the third payment is principal
Answer:
a. First three months and final three months of payments:
Monthly Amortization Schedule
Beginning Balance Interest Principal Ending Balance
1 $90,000.00 $525.00 $73.77 $89,926.23
2 $89,926.23 $524.57 $74.20 $89,852.03
3 $89,852.03 $524.14 $74.63 $89,777.39
358 $1,775.56 $10.36 $588.41 $1,187.15
359 $1,187.15 $6.93 $591.84 $595.30
360 $595.30 $3.47 $595.30 $0.00
b. The percentage of the third payment that is principal is 12.46% ($74.63/$598.77 * 100)
Explanation:
a) Data and Calculations:
Mortgage loan = $90,000
Interest rate = 7%
Period of mortgage = 30 years
Repayment = monthly
Monthly Pay: $598.77
Total number of payments = 360
Loan Payments = $215,558.01
Total Interest = $125,558.01
Define each of the following investment rules and discuss any potential shortcomings of each. In your definition, state the criterion for accepting or rejecting independent projects under each rule. a. Payback period. b. Average accounting return. c. Internal rate of return. d. Profitability index. e. Net present value
internal rate of return
Which of the following types of mortgages would be most advantageous to have on your house if you expected the annual rate of inflation would be higher than most people thought?
a. reverse annuity mortgage
b. interest-only mortgage
c. adjustable-rate mortgage
d. fixed-rate mortgage
Answer:
d. fixed-rate mortgage
Explanation:
Inflation can be defined as the persistent general rise in the price of goods and services in an economy at a specific period of time.
Generally, inflation usually causes the value of money to fall and as a result, it imposes more cost on an economy.
On a related note, when the level of inflation is low in a particular country; their current account balance would be high. However, when the level of inflation is high; it results in low growth and as such increases the home country's current account balance, other things being equal (ceteris paribus).
Hence, if you anticipate a higher annual rate of inflation than most people thought, the fixed-rate mortgage would be most advantageous to have on your house because the interest is fixed or constant over the life of the mortgage loan.
A fixed-rate mortgage can be defined as an installment or fully amortizing mortgage loan that has a fixed (constant) interest rate that doesn't change throughout the entire duration of the loan.
This ultimately implies that, an equal amount of money is paid as principal and interest throughout the life of the mortgage loan.
During the months of January and February, Axe Corporation purchased goods from three suppliers. The sequence of events was as follows:
Jan. 6 Purchased goods for $1,200 from Green with terms 2/10, n/30.
6 Purchased goods from Munoz for $900 with terms 2/10, n/30.
14 Paid Green in full.
Feb. 2 Paid Munoz in full.
28 Purchased goods for $350 from Reynolds with terms 2/10, n/45.
Required:
Prepare journal entries to record the transactions, assuming Axe uses a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
Axe Corporation
Journal Entries:
Jan. 6 Debit Inventory $1,200
Credit Accounts Payable (Green) $1,200
To record the purchase of goods on credit terms 2/10, n/30.
Jan. 6 Debit Inventory $900
Credit Accounts Payable (Munoz) $900
To record the purchase of goods on credit terms 2/10, n/30.
Jan. 14 Debit Accounts Payable (Green) $1,200
Credit Cash $1,176
Credit Cash Discounts $24
To record the payment on account, including discounts.
Feb. 2 Debit Accounts Payable (Munoz) $900
Credit Cash $900
To record the payment on account, including discounts.
Feb. 28 Debit Inventory $350
Credit Accounts Payable (Reynolds)
To record the purchase of goods on credit terms 2/10, n/45.
Explanation:
a) Data and Calculations:
Jan. 6 Inventory $1,200 Accounts Payable (Green) $1,200 terms 2/10, n/30.
Jan. 6 Inventory $900 Accounts Payable (Munoz) $900 terms 2/10, n/30.
Jan. 14 Accounts Payable (Green) $1,200 Cash $1,176 Cash Discounts $24
Feb. 2 Accounts Payable (Munoz) $900 Cash $900
Feb. 28 Inventory $350 Accounts Payable (Reynolds) terms 2/10, n/45.
A machine costing $56,894 with a 6-year life and $51,236 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation. Round your answer to the nearest whole dollar.
Answer:
$8539
Explanation:
Depreciation is a method of expensing the cost of an asset.
Yearly deprecation expense =depreciable cost / useful life
depreciable cost = cost of the machine - salvage value
51,236 / 6 = $8539.33
8539
To round off to the nearest dollar, look at the first number after the decimal, if it is less than 5, add zero to the units term, If it is equal or greater than 5, add 1 to the units term.
Timely Transport provides local delivery service for a number of downtown and suburban businesses. Delivery charges are based on distance and weight involved for each delivery: 21 cents per pound and 16 cents per mile. Also, there is a $26 handling fee per parcel.
a. Develop an expression that summarizes delivery charges. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
y = $
x1 + $
x2 + $
b. Determine the delivery charge for transporting a 50-pound parcel 30 miles. (Do not round your intermediate calculation. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
y = $
Following are the solution to the given points:
For point a:
Allow 'Y' dollars for delivery fees.
[tex]\to Y= (0.30)X_1+ (0.10)X_2 + 20[/tex]
when [tex]X_1[/tex] is the parcel's weight in pounds and [tex]X_2[/tex] is the delivery distance in miles.
For point b:
when driving 30 kilometers with a 50-pound package:
[tex]\to X_1= 50\\\\\to X_2= 30[/tex]
Calculating the shipping fees:
[tex]\to Y= (0.30)X_1+ (0.10)X_2 + 20 \\\\\to Y= (0.30)50+ (0.10)30 + 20 \\\\[/tex]
[tex]= (0.30)50+ (0.10)30 + 20 \\\\= 15+ 3 + 20 \\\\=\$38[/tex]
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Lynn, an agent for Mindwonder Games LLC, executes an unauthorized contract with NOW Marketing Inc. The deal is highly advantageous to Mindwonder, and the company ratifies the contract. The contract is
Answer: c. valid
Explanation:
Even though at the time the contract was executed by the agent it was unauthorized, the fact that the company then ratifies the contract means that they agree with it and have now authorized it.
This would validate the contract because it now has the consent of the party that it was signed for which is Mindwonder Games LLC. Had the contract not been ratified then it would have been void.
Flagstaff Company has budgeted production units of 9,800 for July and 10,000 for August. The direct labor requirement per unit is 0.40 hours. Labor is paid at the rate of $20 per hour. The total cost of direct labor budgeted for the month of August is: Multiple Choice $78,400. $4,000. $80,000. $3,920. $158,400.
Answer: $80,000
Explanation:
There are 10,000 units budgeted for August.
The number of hours it takes to complete a single unit is 0.40 hours.
Each hour is going to cost $20.
Budgeted direct labor for August is:
= Units budgeted * Number of hours required per unit * Cost of labor
= 10,000 * 0.40 * 20
= $80,000
Which of the following is (are) true regarding timeliness and the importance of periodic reporting? (Check all that apply.) Multiple select question. The value of information is often linked to its timeliness. Decision makers require financial statements that are audited to ensure reliability. Businesses report financial information at regular intervals to ensure timeliness of data. Useful information must reach decision makers frequently.
Answer:
• The value of information is often linked to its timeliness.
• Businesses report financial information at regular intervals to ensure timeliness of data.
• Useful information must reach decision-makers frequently.
Explanation:
Periodic reporting simply explains that the finances of businesses are reported in distinct time periods. The purpose of periodic reporting is simply for the provision of information.
Based on the options given, the true options regarding periodic reporting are:
• The value of information is often linked to its timeliness.
• Businesses report financial information at regular intervals to ensure timeliness of data.
• Useful information must reach decision-makers frequently.
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $51,900; total assets, $209,400; common stock, $81,000; and retained earnings, $54,682.)
CABOT CORPORATION Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income taxes 450,600 297,250 153,350 99,200 4,300 49,850 20,082 $ 29,768 Net income CABOT CORPORATION Balance Sheet December 31, 2017 Liabilities and Equity Assets Cash Short-term investments Accounts receivable, net Notes receivable (trade)* Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 18,000 Accounts payable 18,500 4,600 3,600 9,400 Accrued wages payable 30,600 Income taxes payable 5,500 38,150 Long-term note payable, secured by 65,400 mortgage on plant assets 2,600 Common stock 153,300 Retained earnings 81,000 84,450 $ 257,550 $ 257,550 Total liabilities and equity
* These are short-term notes receivable arising from customer (trade) sales.
Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)
Answer:
jjhujhhhvvvjbvcgyggcvjkj
A research study showed that adolescents who watched more than 4 hours of TV per day were more than five times as likely to start smoking as those who watched less than 2 hours a day. The researchers speculate that TV actors’ portrayals of smoking as personally and socially rewarding were an effective indirect method of tobacco promotion.
List the factors that you think cause adolescents to start smoking. (You may select more than one answer. Click the box with a check mark for the correct answer and double click to empty the box for the wrong answer.)
Curiosity
Parents who smoke
Friends who smoke
Seeing teenagers smoke in movies and TV
Boredom
Wanting to look cool
School health classes explaining the harmful effects of smoking\
High cigarette sales taxes
Answer:
peer pressure
Explanation:
when your friend is convincing u in doing some thing wrong
Curiosity, Friends who smoke, Seeing teenagers smoke in movies and TV and Wanting to look cool are some of the reason of adolescents to start smoking.
What are the cause of smoking?Cigarette smoking is linked to cancer, heart disease, stroke, lung disease, diabetes, and chronic obstructive pulmonary disease, which includes emphysema and chronic bronchiti.
Tobacco use raises the risk of tuberculosis, some eye illnesses, and immune system problems such as rheumatoid arthritis.
Thus, option A, C, D and F are correct.
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To assign overhead costs to each product, the company:_____.
a. multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
b. assigns the cost of each activity cost pool in total to one product line.
c. multiplies the overhead rate by the number of direct labor hours used on each product.
d. multiplies the rate of cost drivers per estimated cost for the cost pool by the estimated cost for each cost pool.
Answer:
a. multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
Explanation:
Costing is the measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.
Generally, an activity-based costing uses multiple cost pools such as manufacturing cost or customer services and multiple cost drivers such as direct labor hours worked, number of changes used in engineering department, etc.
Cost pool is simply the amount of money spent by a firm on a particular activity.
Hence, to assign overhead costs to each product, the company multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected to be used per product.
In activity-based costing, the activity rate for an activity cost pool is calculated by using the following formula;
Activity rate = total overhead cost/activity for the activity cost pool.
