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Perdon Corporation manufactures safes-large mobile safes, and large walk-in stationary bank safes. As part of its annual budg

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Answer #1
(a) One moblie safe [Refer working note 1] $492.00 per unit
(b) One walk-in safe [Refer working note 1] $1,312.00 per unit

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Working note 1 - Computation of amount of material handing costs assigned:
Mobile Safes Walk-in Safes
Material handling Overhead allocated        [Refer working note 2]       (a) $98,400.00 $65,600.00
Production ( In units)                                                                                 (b) 200 50
Overhead cost per unit                                                                         (a / b) $492.00 $1,312.00

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Working note 2 - Allocation of Overhead to both the products using activity rates:
Activity cost pool Activity Rate

[Refer working note 3]
Mobile Safes Walk-in Safes
Activity usage Allocation of overhead Activity usage Allocation of overhead
(a) (b) (a x b) (c) (a x c)
Material-handling costs $328.00 Per material move         300 material moves $98,400.00           200 material moves $65,600.00
Purchasing activity costs $135.00 Per purchase order         450 purchase orders $60,750.00           350 purchase orders $47,250.00

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Working note 1 - Calculation of Activity rate
Activity Activity costs

(a)
Activity

(b)
Activity rate

(a / b)
Material-handling costs $164,000 500 material moves $328.00 Per material move
Purchasing activity costs $108,000 800 purchase orders $135.00 Per purchase order
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