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Question Content Area Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be
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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 separate activity pools. The budgeted activity cost and activity base data by product are as follows:
Line Item Description | Activity Cost | Activity Base |
---|---|---|
Procurement | $370,000 | Number of purchase orders |
Scheduling | 250,000 | Number of production orders |
Materials handling | 500,000 | Number of moves |
Product development | 730,000 | Number of engineering changes |
Production | 1,500,000 | 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 | 4,000 | 300 | 1,400 | 10 | 2,000 | 2,000 |
Tape drives | 4,000 | 150 | 800 | 10 | 8,000 | 4,000 |
Wire drives | 12,000 | 800 | 4,000 | 25 | 10,000 | 2,500 |
The activity-based cost (rounded to the nearest cent) for each disk drive unit is
a. $130.69
b. $92.25
c. $394.12
d. $279.57
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