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Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and...

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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.

Activity Cost Activity Base
Procurement $341,200 Number of purchase orders
Scheduling $222,900 Number of production orders
Materials handling $491,000 Number of moves
Product development $724,800 Number of engineering changes
Production $1,560,900 Machine hours
Number of Purchase Orders Number of Production Orders Number of Moves Number of Engineering Changes Machine Hours Number of Units
Disk drives 3,900 380 1,340 14 1,900 1,500
Tape drives 2,500 235 530 4 8,700 3,600
Wire drives 11,800 990 3,700 25 10,100 2,900

Determine the activity rate for materials handling per move.

a.$138.88

b.$18.75

c.$88.15

d.$75.41

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