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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 five

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are provided below.
Line Item Description
Activity Cost
Activity Base
Procurement $396,600 Number of purchase orders
Scheduling 234,600 Number of production orders
Materials handling 430,600 Number of moves
Product development 742,000 Number of engineering changes
Production 1,590,300 Machine hours
Line Item Description
Number of
Purchase
Orders
Number of
Production
Orders
Number
of
Moves
Number of
Engineering
Changes
Machine
Hours
Number
of
Units
Disk drives 3,8602701,420111,6002,000
Tape drives 2,20012572089,5004,400
Wire drives 11,4009804,4003012,0002,100
The activity rate (rounded to the nearest cent) for the procurement activity cost pool is
a. $22.71 per purchase order
b. $288.44 per purchase order
c. $170.62 per purchase order
d. $68.84 per purchase order

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