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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
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 $342,000 Number of purchase orders Scheduling 210,200 Number of production orders Materials handling 494,500 Number of moves Product development 757,900 Number of engineering changes Production 1,575,400 Machine hours Number of Number of Number Number of Number Purchase Orders Production of Engineering Machine of Orders Moves Changes Hours Units Disk drives 3,870 290 1,500 10 2,000 2,200 Tape drives 1,600 165 $10 5 8,500 3,800 Wire drives 12,100 770 3,900 23 11,800 2,200 The activity rate for the product development cost pool is a. $19,945 per engineering change b. $41,884 per engineering change c. $9,972 per engineering change d. $89,751 per engineering change
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