1. 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	$346,900		Number of purchase orders
   Scheduling	246,400		Number of production orders
   Materials handling	483,100		Number of moves
   Product development	757,600		Number of engineering changes
   Production	1,571,400		Machine hours

   	Number of Purchase Orders	Number of Production Orders	Number of Moves	Number of Engineering Changes	Machine Hours	Number of Units
   Disk drives	4,060	400	1,230	12	1,700	2,200
   Tape drives	2,300	185	580	8	8,400	4,000
   Wire drives	12,000	740	3,600	26	12,000	2,000

   The activity rate for the product development cost pool is

   a.$34,586 per engineering change

   b.$8,235 per engineering change

   c.$74,113 per engineering change

   d.$16,470 per engineering change