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Question Content Area Panamint Systems Corporation is estimating activity costs associated with producing disk...

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Accounting

Question Content Area

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 $302,300 Number of purchase orders
Scheduling 210,400 Number of production orders
Materials handling 461,000 Number of moves
Product development 762,200 Number of engineering changes
Production 1,497,300 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 3,920 300 1,430 13 2,000 1,700
Tape drives 1,500 215 770 5 8,100 3,700
Wire drives 11,200 760 3,800 20 10,300 2,700

The activity rate (rounded to the nearest cent) for the materials handling cost pool is

a. $165.02 per move

b. $76.83 per move

c. $18.19 per move

d. $73.4 per move

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