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	$327,900		Number of purchase orders
Scheduling	248,200		Number of production orders
Materials handling	461,500		Number of moves
Product development	746,700		Number of engineering changes
Production	1,565,600		Machine hours

	Number of Purchase Orders	Number of Production Orders	Number of Moves	Number of Engineering Changes	Machine Hours	Number of Units
Disk drives	3,890	450	1,440	15	1,900	2,000
Tape drives	2,200	185	640	6	8,100	3,800
Wire drives	11,800	940	3,900	28	10,300	2,800

The activity rate for the procurement activity cost pool is

a.$157.59 per purchase order

b.$77.12 per purchase order

c.$208.19 per purchase order

d.$18.33 per purchase order

2.)

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 materials handling cost pool is

a.$20.83 per move

b.$80.65 per move

c.$58.82 per move

d.$50.00 per move