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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 $366,300 Number of purchase orders
Scheduling 223,100 Number of production orders
Materials handling 405,700 Number of moves
Product development 795,600 Number of engineering changes
Production 1,448,000 Machine hours
Number of Purchase Orders Number of Production Orders Number of Moves Number of Engineering Changes Machine Hours Number of Units
Disk drives 3,900 330 1,210 12 1,500 2,100
Tape drives 2,000 195 570 7 9,500 3,700
Wire drives 11,500 860 3,900 28 11,300 2,400

The activity rate for the procurement activity cost pool is

a.$264.48 per purchase order

b.$161.08 per purchase order

c.$21.05 per purchase order

d.$64.93 per purchase order

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