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 $304,200 Number of purchase orders Scheduling 233,500 Number of production orders Materials handling 459,400 Number of moves Product development 760,500 Number of engineering changes Production 1,500,900 Machine hours Line Item Description Number ofPurchaseOrders Number ofProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 3,840 400 1,330 13 2,400 2,300 Tape drives 2,300 235 790 7 8,300 4,300 Wire drives 11,700 820 4,500 23 11,700 2,200 The activity rate (rounded to the nearest cent) for the production cost pool is a. $17.05 per machine hour b. $67 per machine hour c. $69.4 per machine hour d. $136.4 per machine hour
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 $304,200 Number of purchase orders Scheduling 233,500 Number of production orders Materials handling 459,400 Number of moves Product development 760,500 Number of engineering changes Production 1,500,900 Machine hours Line Item Description Number ofPurchaseOrders Number ofProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 3,840 400 1,330 13 2,400 2,300 Tape drives 2,300 235 790 7 8,300 4,300 Wire drives 11,700 820 4,500 23 11,700 2,200 The activity rate (rounded to the nearest cent) for the production cost pool is a. $17.05 per machine hour b. $67 per machine hour c. $69.4 per machine hour d. $136.4 per machine hour
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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 | $304,200 | Number of purchase orders |
| Scheduling | 233,500 | Number of production orders |
| Materials handling | 459,400 | Number of moves |
| Product development | 760,500 | Number of engineering changes |
| Production | 1,500,900 | 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 | 3,840 | 400 | 1,330 | 13 | 2,400 | 2,300 |
| Tape drives | 2,300 | 235 | 790 | 7 | 8,300 | 4,300 |
| Wire drives | 11,700 | 820 | 4,500 | 23 | 11,700 | 2,200 |
The activity rate (rounded to the nearest cent) for the production cost pool is
a. $17.05 per machine hour
b. $67 per machine hour
c. $69.4 per machine hour
d. $136.4 per machine hour
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