**Activity Cost Estimation for Drive Production**Panamint Systems Corporation is analyzing the activity costs involved in manufacturing disk drives, tape drives, and wire drives. The company aims to allocate indirect labor costs across four distinct activity pools. Presented below are the budgeted activity costs and the related activity base data for each product category.**Activity Cost and Activity Base**- **Procurement** - Cost: $392,400 - Base: Number of purchase orders- **Scheduling** - Cost: $233,100 - Base: Number of production orders- **Materials Handling** - Cost: $409,400 - Base: Number of moves- **Product Development** - Cost: $708,700 - Base: Number of engineering changes- **Production** - Cost: $1,526,300 - Base: Machine hours**Activity Base Data by Product**| Product Type | Number of Purchase Orders | Number of Production Orders | Number of Moves | Number of Engineering Changes | Machine Hours | Number of Units ||--------------|---------------------------|----------------------------|----------------|------------------------------|---------------|----------------|| Disk drives | 4,090 | 280 | 1,410 | 11 | 1,800 | 2,300 || Tape drives | 1,800 | 185 | 740 | 7 | 8,300 | 4,300 || Wire drives | 12,000 | 910 | 4,500 | 23 | 11,500 | 2,400 |**Cost Calculation**The activity-based cost for each disk drive unit is determined using the above data. The possible options for the cost per disk drive unit are:- A. $793.58- B. $21.93- C. $235.34- D. $191.64This setup helps Panamint Systems Corporation efficiently distribute activity costs, assisting in precise cost management and allocation for each product type.

Name: **Activity Cost Estimation for Drive Production**Panamint Systems Cor
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Description: **Activity Cost Estimation for Drive Production**Panamint Systems Corporation is analyzing the activity costs involved in manufacturing disk drives, tape drives, and wire drives. The company aims to allocate indirect labor costs across four distinct

Activity-based costing is a method of allocating the indirect cost to products as per the activity…

Business

Accounting

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 Disk drives Tape drives Wire drives Activity Cost $392,400 233,100 409,400 708,700 1,526,300 Machine hours Activity Base Number of purchase orders Number of production orders Number of moves Number of engineering changes Number of Purchase Orders Number of Number of Moves Production Orders 4,090 1,800 12,000 The activity-based cost for each disk drive unit is Oa. $793.58 Ob. $21.93 Oc. $235.34 Od. $191.6 280 185 910 1,410 1 740 4,500 Number of Engineering Changes 11 7 23 Machine Hours 1,800 8,300 11,500 Number of Units 2,300 4,300 2,400

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 Disk drives Tape drives Wire drives Activity Cost $392,400 233,100 409,400 708,700 1,526,300 Machine hours Activity Base Number of purchase orders Number of production orders Number of moves Number of engineering changes Number of Purchase Orders Number of Number of Moves Production Orders 4,090 1,800 12,000 The activity-based cost for each disk drive unit is Oa. $793.58 Ob. $21.93 Oc. $235.34 Od. $191.6 280 185 910 1,410 1 740 4,500 Number of Engineering Changes 11 7 23 Machine Hours 1,800 8,300 11,500 Number of Units 2,300 4,300 2,400

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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A company sells two types of products: standard and deluxe. It prepares the following analysis showing budgeted cost and cost driver activity for each of its three activities.
compute the budgeted factory overhead rate (i.e., the $ rate per activity base hour, etc.) for department y
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 $304,100 Number of purchase orders Scheduling 238,200 Number of production orders Materials handling 445,500 Number of moves Product development 734,300 Number of engineering changes Production 1,517,800 Machine hours Number of Number of Number Number of Number Purchase Production of Engineering Machine of Orders Orders Moves Changes Hours Units Disk drives 4,070 320 1,480 14 1,600 2,400 Tape drives 1,800 185 740 5 10,000 4,500 Wire drives 12,900 740 3,800 23 10,100 2,400 The activity-based cost for each tape drive unit is Oa. $725.11 Ob. $247.23 Oc. $201.36 Ód. $16.2
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compute the budgeted factory overhead rate (i.e., the $ rate per activity base hour, etc.) for department x
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 $331,200 Number of purchase orders Scheduling 206,700 Number of production orders Materials handling 450,000 Number of moves Product development 799,500 Number of engineering changes Production 1,521,400 Machine hours Number of Number of Number Number of Number Purchase Production of Engineering Machine of Orders Orders Moves Changes Hours Units Disk drives 4,030 290 1,340 13 2,100 1,600 Tape drives 2,500 175 600 8,400 3,900 Wire drives 11,200 730 3,600 22 10,400 2,800 The activity rate for the materials handling cost pool is O a. $81.23 per move Ob. $18.68 per move Oc. $72.79 per move Od. $172.97 per move
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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 $323,200 Number of purchase orders Scheduling 202,000 Number of production orders Materials handling 437,000 Number of moves Product development 700,700 Number of engineering changes Production 1,408,000 Machine hours Number ofPurchaseOrders Number ofProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 4,170 440 1,480 14 2,400 2,100 Tape drives 1,600 225 570 4 9,100 3,700 Wire drives 12,700 890 4,400 30 10,700 2,400 The activity rate for the procurement activity cost pool is a.$63.42 per purchase order b.$17.50 per purchase…
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