Question Content Area Panamint Systems Corporation is estimating activity costs associated with producing disk...
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Accounting
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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 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
$384,100
Number of purchase orders
Scheduling
221,400
Number of production orders
Materials handling
469,900
Number of moves
Product development
720,700
Number of engineering changes
Production
1,487,100
Machine hours
Line Item Description
Number ofPurchaseOrders
Number ofProductionOrders
NumberofMoves
Number ofEngineeringChanges
MachineHours
NumberofUnits
Disk drives
3,810
350
1,230
14
2,100
2,400
Tape drives
1,800
125
520
7
8,200
4,100
Wire drives
11,700
980
3,700
26
11,400
2,900
The activity-based cost (rounded to the nearest cent) for each disk drive unit is
a. $22.19
b. $251.02
c. $188.56
d. $657.82
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