Activity rates for use in service businesses are calculated by a. multiplying the budgeted activity cost by the total activity-base usage. b. dividing the budgeted activity cost by the total activity-base usage. c. dividing the total activity-base usage by the budgeted activity cost. d. adding the budgeted activity cost to the total activity-base usage.

To determine the correct method for calculating activity rates in service businesses, let's analyze the options provided: 1. **Activity Rate Definition**: The activity rate is typically calculated to allocate costs based on the level of activity. It helps in understanding how much cost is incurred per unit of activity. 2. **Known Condition**: The activity rate is calculated by taking the total budgeted activity cost and dividing it by the total activity-base usage. Now, let's evaluate the options: a. **Multiplying the budgeted activity cost by the total activity-base usage**: This would give a total cost, not an activity rate. b. **Dividing the budgeted activity cost by the total activity-base usage**: This is the correct method to find the activity rate. c. **Dividing the total activity-base usage by the budgeted activity cost**: This would give a ratio that does not represent the activity rate. d. **Adding the budgeted activity cost to the total activity-base usage**: This does not relate to calculating an activity rate. Based on this analysis, the correct answer is: **b. dividing the budgeted activity cost by the total activity-base usage.**