24 EXERCiss D Milan Machining Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity $60,000 Number of setups $45,000 Inspection hours Setting up 300 Inspecting 4500 Grinding 18.000 $90,000 Machine hours Receiving Number of parts 50,000 The company produces several different machine. subassemblies used by other manufacturers. Information on separate batches for two of these blies follows: Subassembly A Subassembly B Direct materials $850 $950 Direct labour $600 $600. Units completed 100 50 Number of setups Inspection hours Machine hours 30 Parts used The companys normal activity is 20,000 direct labour hours. Each 50 hours of direct labour Upon investigation, you discover that Receiving employs one worker, spends 75 percent of on the receiving activity and 25 percent of her time on inspecting products. Her salary is $40,000. Receiving also uses a forklift, at a cost of $6,000per year for amortization and fuel. The forklift is used only in receiving. Required: Choose the best answer for each of the following multiple-choice questions based on the preceding data for Milan Machinirt Company. 24 The amount of cost assigned to the receiving activity is a. $40,000. b. $46,000. c. $16,000. d. $36,000. 25. The activity rate for receiving is a. $0.80 per part. b. $0.72 per part. c, $0.812 per part. di $0.32 per part. e. None of the above