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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 $ 370,000 Number of purchase orders Scheduling 250,000 Number of production orders 500,000 Materials handling Number of moves 730,000 Product development Number of engineering changes Machine hours 1,500,000 Production Number Number of of Number Number of Machine Number Purchase of Engineering Hours of Orders Production Moves Changes Units Orders 10 2,000 2,000 300 1,400 4,000 Disk drives 10 8,000 4,000 150 800 4,000 10,000 2,500 25 Tape drives 4,000 800 12,000 Wire drives -Rook Air Determine the activity rate for product development per change. O a) $30,417 Ob) $73,000 c) $8,588 d) $16,222
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