Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and...
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Accounting
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
$341,200
Number of purchase orders
Scheduling
$222,900
Number of production orders
Materials handling
$491,000
Number of moves
Product development
$724,800
Number of engineering changes
Production
$1,560,900
Machine hours
Number of Purchase Orders
Number of Production Orders
Number of Moves
Number of Engineering Changes
Machine Hours
Number of Units
Disk drives
3,900
380
1,340
14
1,900
1,500
Tape drives
2,500
235
530
4
8,700
3,600
Wire drives
11,800
990
3,700
25
10,100
2,900
Determine the activity rate for materials handling per move.
a.$138.88
b.$18.75
c.$88.15
d.$75.41
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