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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 $322,900 Number of purchase orders
Scheduling $233,900 Number of production orders
Materials handling $499,900 Number of moves
Product development $783,400 Number of engineering changes
Production $1,595,000 Machine hours
Number of Purchase Orders Number of Production Orders Number of Moves Number of Engineering Changes Machine Hours Number of Units
Disk drives 4,200 410 1,460 15 2,100 2,100
Tape drives 1,800 165 590 8 8,900 3,900
Wire drives 12,300 900 3,500 30 11,300 3,000

Determine the activity-based cost for each disk drive unit.

a.$642.18

b.$222.01

c.$305.96

d.$17.64

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