Question
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
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.
ActivityCostCost DriverMaterial handling$269,000Number of partsMaterial insertion3,390,000Number of partsAutomated machinery872,000Machine hoursFinishing256,000Direct labor hoursPackaging256,000Orders shippedTotal$5,043,000
The following information pertains to the three product lines for next year:
EconomyStandardDeluxeUnits to be produced10,0004,1002,550Orders to be shipped1,720710200Number of parts per unit101525Machine hours per unit136Labor hours per unit333
What is Barnett's pool rate for the material-handling activity?
Multiple Choice
- $1.19 per part.
- $2.69 per part.
- $5.39 per labor hour.
- $10.77 per part.
- None of the answers is correct.
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