Question

Ace Manufacturing identifies the following activities and drivers for its operations: Activity Activity Driver Driver Quantity...

Ace Manufacturing identifies the following activities and drivers for its operations:

Activity Activity Driver Driver Quantity
Moving Materials Number of moves 200
Machining Machine hours 10,000


Ace estimates Moving Materials and Machining will cost $1,400,000 and $3,000,000 respectively. Ace's activity rates are:

a.$70 per move and $3 per machine hour.

b.$7 per move and $30 per machine hour.

c.$700 per move and $3,000 per machine hour.

d.$7,000 per move and $300 per machine hour.

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Answer #1
Activity Activity Driver Driver Quantity Activity Cost Activity Rate
Moving Materials Number of moves 200 1,400,000 1,400,000/200 = $7000 per move
Machining Machine hours 10,000 3,000,000 3,000,000/10,000 = $300 per machine hour

Correct option is d.

.$7,000 per move and $300 per machine hour.

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