Item 10

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	$	304,000			Number of parts
Material insertion		3,000,000			Number of parts
Automated machinery		911,000			Machine hours
Finishing		220,000			Direct labor hours
Packaging		220,000			Orders shipped
Total	$	4,655,000

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

	Economy				Standard				Deluxe
Units to be produced		15,400				7,200				2,400
Orders to be shipped		1,800				790				290
Number of parts per unit		10				20				30
Machine hours per unit		1				3				5
Labor hours per unit		3				3				3

What is Barnetts pool rate for the packaging activity?

Multiple Choice

• $2.79 per machine hour.

• $2.93 per labor hour.

• $7.64 per unit.

• $76.39 per order shipped.

• None of the answers is correct.