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
$342,900
Number of purchase orders
Scheduling
219,900
Number of production orders
Materials handling
482,000
Number of moves
Product development
722,700
Number of engineering changes
Production
1,425,800
Machine hours
Number of Purchase Orders
Number of Production Orders
Number of Moves
Number of Engineering Changes
Machine Hours
Number of Units
Disk drives
3,990
430
1,460
12
2,000
1,700
Tape drives
1,900
205
650
7
9,700
4,100
Wire drives
11,400
730
4,100
20
11,000
3,000
The activity rate for the procurement activity cost pool is
a.$62.81 per purchase order
b.$161.10 per purchase order
c.$251.21 per purchase order
d.$19.83 per purchase order
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