1. Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.

Activity	Cost	Cost Driver
Material handling	$ 285,000	Number of parts
Material insertion	2,850,000	Number of parts
Automated machinery	1,328,000	Machine hours
Finishing	247,200	Direct labor hours
Packaging	247,200	Orders shipped
Total	$ 4,957,400

The following information pertains to the three product lines for next year:

	Economy	Standard	Deluxe
Units to be produced	11,200	6,200	3,200
Orders to be shipped	1,120	620	320
Number of parts per unit	10	15	25
Machine hours per unit	2	4	6
Labor hours per unit	3	3	3

Under Barnetts activity-based costing system, what is the per-unit overhead cost of Deluxe?

a. None of the answers is correct.

b. $419.

c. $277.

d. $267.

2. Activity Based-costing systems are structured on multiple, volume-based cost drivers.

a. True

b. False

3. Metalica Company applies overhead based on machine hours. At the beginning of 20x1, the company estimated that manufacturing overhead would be $450,000, and machine hours would total 30,000. By 20x1 year-end, actual overhead totaled $420,000, and actual machine hours were 25,000. On the basis of this information, the 20x1 predetermined overhead rate was:

a. $18 per machine hour.

b. $15 per machine hour.

c. $16.8 per machine hour.

d. $28 per machine hour.

e. $14 per machine hour.