1.)

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	$338,700		Number of purchase orders
Scheduling	249,000		Number of production orders
Materials handling	433,000		Number of moves
Product development	716,500		Number of engineering changes
Production	1,454,300		Machine hours

	Number of Purchase Orders	Number of Production Orders	Number of Moves	Number of Engineering Changes	Machine Hours	Number of Units
Disk drives	3,800	350	1,490	12	1,700	2,500
Tape drives	2,000	155	730	3	9,300	3,700
Wire drives	11,100	850	3,500	24	10,500	3,000

The activity-based cost for each wire drive unit is

a.$20.04

b.$235.49

c.$598.25

d.$218.38

2.)

Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below.

Product	Number of Units	Direct Labor Hours per Unit	Machine Hours per Unit
Rings	1,000	4	6
Dings	2,000	3	9

All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $90,000. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $105,000.

Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours.

The total factory overhead allocated per unit of Rings is

a.$65.25

b.$64.50

c.$44.10

d.$23.25

3.)

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five 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

	Number of Purchase Orders	Number of Production Orders	Number of Moves	Number of Engineering Changes	Machine Hours	Number of Units
Disk drives	4,000	300	1,400	10	2,000	2,000
Tape drives	4,000	150	800	10	8,000	4,000
Wire drives	12,000	800	4,000	25	10,000	2,500

The activity rate for the procurement activity cost pool is

a.$15.42 per purchase order

b.$37.00 per purchase order

c.$43.53 per purchase order

d.$18.50 per purchase order