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Quick Start Engines has two departments, Assembly and Testing. You are given the following information about the costs of 5 activities that occur at the
Quick Start Engines has two departments, Assembly and Testing. You are given the following information about the costs of 5 activities that occur at the manufacturing plant monthly Activity Material handling Supervision of direct labour Janitorial and cleaning Machining Total costs $100,000 200,000 parts 105,000 150,000 240,000 $595,000 70 employees 3,000 hours 6,000 machine hours The above activities are used by the two departments as follows: Material handling Supervision of direct labour Time spent cleaning Number of machine hours Assembly 150,000 parts 30 employees 2,000 hours 4,000 machine hours Testing 50,000 parts 40 employees 1,000 hours 2,000 machine hours What is the ABC allocation rate for supervision of direct labour? $3,500 per employee $1,500 per employee $0.50 per part $50 per hour spent in supervision
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