MC.18.71.ALGO

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	$351,500		Number of purchase orders
Scheduling	213,900		Number of production orders
Materials handling	487,700		Number of moves
Product development	714,000		Number of engineering changes
Production	1,441,200		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	390	1,200	14	2,300	2,400
Tape drives	2,200	235	590	6	8,700	3,500
Wire drives	11,700	940	3,700	23	10,700	2,100

The activity rate for the procurement activity cost pool is

a.$136.68 per purchase order

b.$224.60 per purchase order

c.$19.76 per purchase order

d.$66.41 per purchase order