Miramar Industries manufactures two products: A and B. The manufacturing operation involves three overhead activitiesproduction setup, materials handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities:

Activity	Cost	Activity Base
Production setup	$250,000	Number of setups
Material handling	150,000	Number of parts
General overhead	80,000	Number of direct labor hours

Each product's total activity in each of the three areas are as follows:

	Product A	Product B
Number of setups	100	300
Number of parts	40,000	20,000
Number of direct labor hours	8,000	12,000

What is the activity rate for materials handling?

a.$7.50 per part

b.$1.50 per part

c.$3.75 per part

d.$2.50 per part

Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $19 per unit. Fixed costs are $25,000 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,500 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $1 per unit would be eliminated. Should the special order be accepted?

a.yes

b.no

c.The answer cannot be determined from the data given.

d.There would be no difference in accepting or rejecting the special order.