Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.
_________________________Activity Cost Activity Base
Procurement...............................$370,000.............................Number of purchase orders
Scheduling...................................250,000..........................Number of production orders
Materials handling.......................500,000............................................Number of moves
Product development..................730,000......................Number of engineering changes
Production................................1,500,000.................................................Machine hours

1. Determine the activity rate for procurement per purchase order.
a. $43.53
b. $18.50
c. $15.42
d. $37.00
2. Determine the activity rate per production order for scheduling.
a. $200.00
b. $20.00
c. $29.41
d. $10.42
3. Determine the activity rate for materials handling per move.
a. $58.82
b. $50.00
c. $20.83
d. $80.65
4. Determine the activity rate for product development per change.
a. $73,000
b. $8,588
c. $30,417
d. $16,222
5. Determine the activity rate for production per machine hour.
a. $62.50
b. $150.00
c. $75.00
d. $176.47
6. Determine the activity-based cost for each disk drive unit.
a. $92.25
b. $130.69
c. $394.12
d. $279.57
7. Determine the activity-based cost for each wire drive unit.
a. $204.13
b. $173.51
c. $744.06
d. $394.12
8. Determine the activity-based cost for each tape drive unit.
a. $97.73
b. $232.69
c. $394.12
d. $103.84

Transcribed Image Text:

Number of Number of Number of Number of Number of Machine Purchase production hours units moves engineering Order changes order Disk drives 300 2,000 4,000 1,400 10 2,000 4,000 800 4,000 Tape drives 150 10 8,000 25 Wire drives 800 4,000 10,000 2,500 12,000