Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tape drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgetedactivity cost and activity base data by product are as follows:ProcurementSchedulingMaterials handlingProduct developmentProductionActivity CostActivity Base$370,000 Number of purchase orders250,000Number of production orders500,000Number of moves730,0001,500,000Disk drivesTape drivesWire drivesNumber ofProductionOrders4,0003004,00015012,000800The activity rate (rounded to the nearest dollar) for the product development cost pool isO a. $73,000 per engineering changeb. $30,417 per engineering changeO c. $16,222 per engineering changeO d. $8,588 per engineering changeNumber of engineering changesMachine hoursNumber ofPurchaseOrdersNumberofMoves1,400800Number ofEngineeringChanges1010254,000MachineHours2,0008,00010,000NumberofUnits2,0004,0002,500

Activity based costing is a method to allocate the costs to products. In activity based costing,…

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tape 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: Procurement Scheduling Materials handling Product development Production Disk drives Tape drives Wire drives Activity Cost Activity Base $370,000 Number of purchase orders 250,000 Number of production orders 500,000 Number of moves 730,000 Number of engineering changes 1,500,000 Machine hours Number of Number of Number Production of Orders Moves 300 Purchase Orders 150 Number of Engineering Changes 10 4,000 1,400 4,000 800 12,000 4,000 The activity rate (rounded to the nearest dollar) for the product development cost pool is O a. $73,000 per engineering change O b. $30,417 per engineering change Oc. $16,222 per engineering change O d. $8,588 per engineering change 800 10 25 Machine Hours 2,000 8,000 10,000 A Number of Units 2,000 4,000 2,500

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tape 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: Procurement Scheduling Materials handling Product development Production Disk drives Tape drives Wire drives Activity Cost Activity Base $370,000 Number of purchase orders 250,000 Number of production orders 500,000 Number of moves 730,000 Number of engineering changes 1,500,000 Machine hours Number of Number of Number Production of Orders Moves 300 Purchase Orders 150 Number of Engineering Changes 10 4,000 1,400 4,000 800 12,000 4,000 The activity rate (rounded to the nearest dollar) for the product development cost pool is O a. $73,000 per engineering change O b. $30,417 per engineering change Oc. $16,222 per engineering change O d. $8,588 per engineering change 800 10 25 Machine Hours 2,000 8,000 10,000 A Number of Units 2,000 4,000 2,500

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 $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
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