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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 separate activity pools. The budgeted activity cost and activity base data by product are provided below. Procurement Scheduling Materials handling Product development Production Activity Cost Activity Base $362,500 Number of purchase orders 244,700 Number of production orders 486,700 Number of moves 766,200 1,535,800 Machine hours Number of engineering changes Number of Number of Number Number of Engineering of Moves Changes 15 6 25 Purchase Orders Production Orders Disk drives 4,090 Tape drives 2,400 Wire drives 11,900 The activity-based cost for each disk drive unit is Oa. $665.88 Ob. $300.73 Oc. $208.11 Od. $19.71 270 225 760 1,240 780 3,500 Machine Hours 2,500 10,000 10,200 Number of Units 2,200 4,500 2,700

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. Procurement Scheduling Materials handling Product development Production Activity Cost Activity Base $362,500 Number of purchase orders 244,700 Number of production orders 486,700 Number of moves 766,200 1,535,800 Machine hours Number of engineering changes Number of Number of Number Number of Engineering of Moves Changes 15 6 25 Purchase Orders Production Orders Disk drives 4,090 Tape drives 2,400 Wire drives 11,900 The activity-based cost for each disk drive unit is Oa. $665.88 Ob. $300.73 Oc. $208.11 Od. $19.71 270 225 760 1,240 780 3,500 Machine Hours 2,500 10,000 10,200 Number of Units 2,200 4,500 2,700

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 12E: Activity cost pools, activity rates, and product costs using activity-based costing Caldwell Home...
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**Panamint Systems Corporation: Activity Cost Estimation** Panamint Systems Corporation is assessing the activity costs associated with manufacturing disk drives, tape drives, and wire drives. Indirect labor expenses are tracked through four distinct activity pools. Below are the budgeted activity costs and activity base data for each product. **Activity Cost and Bases** - **Procurement** - Activity Cost: $362,500 - Activity Base: Number of purchase orders - **Scheduling** - Activity Cost: $244,700 - Activity Base: Number of production orders - **Materials Handling** - Activity Cost: $486,700 - Activity Base: Number of moves - **Product Development** - Activity Cost: $766,200 - Activity Base: Number of engineering changes - **Production** - Activity Cost: $1,535,800 - Activity Base: Machine hours **Activity Base Data for Products** - **Disk Drives** - Number of Purchase Orders: 4,090 - Number of Production Orders: 270 - Number of Moves: 1,240 - Number of Engineering Changes: 15 - Machine Hours: 2,500 - Number of Units: 2,200 - **Tape Drives** - Number of Purchase Orders: 2,400 - Number of Production Orders: 225 - Number of Moves: 780 - Number of Engineering Changes: 6 - Machine Hours: 10,000 - Number of Units: 4,500 - **Wire Drives** - Number of Purchase Orders: 11,900 - Number of Production Orders: 760 - Number of Moves: 3,500 - Number of Engineering Changes: 25 - Machine Hours: 10,200 - Number of Units: 2,700 **Question:** Calculate the activity-based cost for each disk drive unit: a. $665.88 b. $300.73 c. $208.11 d. $19.71 The table provides a detailed breakdown of activity costs linked to manufacturing processes, enabling precise cost allocation across different product lines.
Transcribed Image Text:**Panamint Systems Corporation: Activity Cost Estimation** Panamint Systems Corporation is assessing the activity costs associated with manufacturing disk drives, tape drives, and wire drives. Indirect labor expenses are tracked through four distinct activity pools. Below are the budgeted activity costs and activity base data for each product. **Activity Cost and Bases** - **Procurement** - Activity Cost: $362,500 - Activity Base: Number of purchase orders - **Scheduling** - Activity Cost: $244,700 - Activity Base: Number of production orders - **Materials Handling** - Activity Cost: $486,700 - Activity Base: Number of moves - **Product Development** - Activity Cost: $766,200 - Activity Base: Number of engineering changes - **Production** - Activity Cost: $1,535,800 - Activity Base: Machine hours **Activity Base Data for Products** - **Disk Drives** - Number of Purchase Orders: 4,090 - Number of Production Orders: 270 - Number of Moves: 1,240 - Number of Engineering Changes: 15 - Machine Hours: 2,500 - Number of Units: 2,200 - **Tape Drives** - Number of Purchase Orders: 2,400 - Number of Production Orders: 225 - Number of Moves: 780 - Number of Engineering Changes: 6 - Machine Hours: 10,000 - Number of Units: 4,500 - **Wire Drives** - Number of Purchase Orders: 11,900 - Number of Production Orders: 760 - Number of Moves: 3,500 - Number of Engineering Changes: 25 - Machine Hours: 10,200 - Number of Units: 2,700 **Question:** Calculate the activity-based cost for each disk drive unit: a. $665.88 b. $300.73 c. $208.11 d. $19.71 The table provides a detailed breakdown of activity costs linked to manufacturing processes, enabling precise cost allocation across different product lines.
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