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

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

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		$352,000		Number of purchase orders
Scheduling		$213,200		Number of production orders
Materials handling		$454,500		Number of moves
Product development		$725,300		Number of engineering changes
Production		$1,401,500		Machine hours

	Number of Purchase Orders	Number of Production Orders	Number of Moves	Number of Engineering Changes	Machine Hours	Number of Units
Disk drives	3,800	310	1,500	11	2,100	2,200
Tape drives	1,700	215	580	6	8,300	3,900
Wire drives	12,600	960	3,700	29	11,600	3,000

Determine the activity rate for product development per change.

a. $33,112

b. $70,953

c. $7,884

d. $15,767

business accounting

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Answer 1

Answer #1

Activity Total Cost Cost Driver Number of Engineering No of Activity Cost per Activity Product Development $7,25,300.00 Changes 11+6+29-46 725300/46 $15,767.39

Answer is D

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Answer 2

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