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
$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 ofPurchaseOrders
Number ofProductionOrders
NumberofMoves
Number ofEngineeringChanges
MachineHours
NumberofUnits
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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