HiFi Company manufactures three types of game console devices: Economy, Standard, and Deluxe. The company,...
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Accounting
HiFi Company manufactures three types of game console devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.
Activity
Overhead Cost
Cost Driver
Material handling
$450,000
Number of parts
Material insertion
2,500,000
Number of parts
Automated machinery
1,680,000
Machine hours
Finishing
340,000
Direct labour hours
Packaging
340,000
Orders shipped
$3,880,000
The following information pertains to the three product lines for next year:
Economy
Standard
Deluxe
Units to be produced
20,000
10,000
4,000
Orders to be shipped
2,000
1,000
400
Number of parts per unit
20
30
50
Machine hours per unit
2
6
10
Labour hours per unit
4
4
4
What is Hifis activity rate for packaging?
Group of answer choices
$850
$340
$170
$100
Answer & Explanation
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