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 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 $$318,600$ Number of purchase orders

Scheduling $224,300$ Number of production orders

Materials handling $469,400$ Number of moves

Product development $761,000$ Number of engineering changes

Production $1,405,200$ 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 $3,8403801,240151,5001,900$

Tape drives $1,50012560088,1004,400$

Wire drives $11,3009504,2002110,3002,300$

The activity rate $($rounded to the nearest dollar$)$ for the product development cost pool is

a$.$ $$8,648$ per engineering change

b$.$ $$17,295$ per engineering change

c$.$ $$36,320$ per engineering change

d$.$ $$77,830$ per engineering change