Question: ABC Inc, is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five activity

ABC Inc, is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five activity pools. The budgeted activity cost and activity base data by product are provided below Activity Cost Activity Base Number of purchase orders Procurement $ 370,000 Number of production orders Scheduling 250,000 Number of moves Materials handling 500,000 Product development 730,000 Number of engineering changes Production Machine hours 1,500,000 Number Number of of Purchase Production Orders Orders Number Number of Machine Number of Engineering Hours of Moves Changes Units Disk drives 4,000 300 1,400 10 2,000 2,000 Tape drives 4,000 150 800 8,000 4,000 Wire drives 12,000 800 4,000 25 10,000 2,500 Total 20,000 1.250 6,200 45 20.000 8,500 Number Number of of Purchase Production Orders Orders Number Number of Machine Number of Engineering Hours of Moves Changes Units Disk drives 4,000 300 1,400 2,000 2,000 Tape drives 4,000 150 800 8,000 4,000 Wire drives 12,000 800 4,000 10,000 2,500 Total 20,000 1.250 6,200 20,000 8,500 The rate for the procurement activity cost pool is $43.53 per purchase order $18.50 per purchase order $15.42 per purchase order $37.00 per purchase order
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