**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.

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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. Activity Cost Activity Base Procurement $348,600 Number of purchase orders Scheduling 200,100 Number of production orders Materials handling 471,600 Number of moves Product development 741,200 Number of engineering changes Production 1,511,600 Machine hours Number of Number of Number Number of Number Purchase Production of Engineering Machine of Orders Orders Moves Changes Hours Units Disk drives 3,910 380 1,430 10 1,900 2,400 Tape drives 1,600 235 570 8,000 3,700 Wire drives 11,300 880 4,200 28 11,500 2,300 The activity rate for the procurement activity cost pool is Oa. $133.85 per purchase order Ob. $70.64 per purchase order Oc. S20.74 per purchase order Od. S233.18 per purchase order Previous Next Submit Test for…
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Shilongo Ltd uses Job costing to attribute costs to individual products and services provide to its customers. It has begun the preparation of its fixed production cost budget for the forthcoming period. The company has three production departments Machining, Assembly and Finishing and two service department stores and maintenance. The following costs have been produced: Machining Assembly Finishing Stores Maintenance Overhead costs 6000 2500 1500 1000 800 The number of machine and labour hours budgeted for the forthcoming period is budgeted as follows: Machining Assembly Finishing Machine hours 500 40 50 Labour hours 100 300 200 Overheads are absorbed in Assembly and Finishing departments on a labour hour basis and in Machining department they are absorbed on a machine hour basis. It has been estimated that service departments usage is as follows: Machining Assembly Finishing Stores Maintenance Maintenance 55% 20% 20% 5% - Stores 40% 30% 20% - 10%…
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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. Activity Cost Activity Base Procurement $364,200 Number of purchase orders Scheduling 243,400 Number of production orders Materials handling 417,300 Number of moves Product development 773,900 Number of engineering changes Production 1,428,300 Machine hours Number of Number of Number Number of Number Purchase Production of Engineering Machine of Orders Orders Moves Changes Hours Units Disk drives 4,120 270 1,500 11 2,200 2,100 Tape drives 2,400 245 500 7 8,500 3,500 Wire drives 11,500 790 3,500 21 10,700 2,400 The activity-based cost for each tape drive unit is Oa. $291.69 Ob. $239.52 Oc. $740.06 Od. $20.21
Prism Company has two service departments: security departments and maintenance departments that give services to two producing departments: machining department and assembling department. Security department costs will be allocated using the number of employees and maintenance department costs will be allocated using direct labor hours. For calculation of predetermined rate, machine hours and direct labor hours are used for machining and assembling departments, respectively.
Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $27 per machine hour Assembly $11 per direct labor hour Setup $45 per setup Inspecting $23 per inspection Production scheduling $12 per production order Purchasing $9 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,861 1,098 Direct labor hours 413 161 Setups 62 19 Inspections 615 369 Production orders 65 13 Purchase orders 211 129 Units produced 295 198 Use the activity rate and usage information to calculate the total activity cost and…
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. Activity Cost Activity Base Procurement $302,300 Number of purchase orders Scheduling $220,600 Number of production orders Materials handling $416,500 Number of moves Product development $755,400 Number of engineering changes Production $1,551,600 Machine hours Number ofPurchaseOrders Number ofProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 4,160 380 1,320 11 1,900 1,600 Tape drives 2,500 155 770 6 9,900 4,000 Wire drives 12,700 770 3,900 23 10,400 2,700 Determine the activity rate per production order for…
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. ActivityCost 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 Number ofPurchaseOrders Number of Production Orders NumberofMoves Number of EngineeringChanges MachineHours NumberofUnits 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 Determine the activity rate per production order for scheduling. Group of answer choices…
Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $23.18 per unit, while product B has been assigned $9.84 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Activity Costs. $426,000 Machine setup Materials handling 171,000 54,000 Electric power The following cost information pertains to the production of A and B, just two of Hakara's many products: Number of units produced Direct materials cost Direct labor cost Number of setup hours Pounds of materials used Kilowatt-hours Product A Product B A 5,000 $ 37,000 $ 24,000 100 1,000 2,000 X Answer is not complete. Cost per Unit $ 18.22 X Cost Drivers Setup hours Pounds of materials. Kilowatt-hours Required: 1. Use activity-based costing to determine a unit cost for each product.…
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment Number of setups Ordering costs Number of orders Machine costs Receiving Direct materials Direct labor Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Units completed Direct labor hours Number of setups Number of orders $627,000 481,000 16,200 6,400 370 5,800 24,900 3,700 The company's normal activity is 7,900 direct labor hours. Machine hours Receiving hours Required: Model A Model B $482,510 372,000 864,000 410,000 Receiving hours Model A Machine hours $ del B Model B Unit Cost $836,000 497,000 8,500 1,500 240 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. 12,800 18,300 6,300 610 18,600 43,200 10,000 2. Determine the unit cost for…