Question

Salvatore LLC provides a wide variety of legal service and uses an activity-based costing system. Data from its activity-based costing system for all services follows:

Activity cost pool total cost total activity

research $173,200 620 hours of paralegal time

client meeting 345,300 3900 number of meeting hours

court filling fees 303,500 1600 number of cases

document preparation 145,600 4900 number of documents

The cost pool activity rate for client meeting is: A. $58.29 per meeting hour B. $7.08 per meeting hour C. $27.94 per meeting hour D. $88.54 per meeting hour

Answer 1

Solution:
	Answer is D. $88.54 per meeting hour
Working Notes:
	The cost pool activity rate for client meeting = Total meeting cost / To no of meetings
		=$345,300/3900
		=$88.53846
		=$88.54 per meeting
Notes	Under ABC cost pool activity rate is calculated by dividing the total cost of the activity by the total number of the activities of that cost pool.
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