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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 $370,000 Number of purchase orders
Scheduling 250,000 Number of production orders
Materials handling 500,000 Number of moves
Product development 730,000 Number of engineering changes
Production 1,500,000 Machine hours

Number of Purchase Orders Number of Production Orders Number of Moves Number of Engineering Changes Machine Hours Number of Units
Disk drives 4,000 300 1,400 10 2,000 2,000
Tape drives 4,000 150 800 10 8,000 4,000
Wire drives 12,000 800 4,000 25 10,000 2,500

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

a.$97.73

b.$103.84

c.$394.12

d.$232.69

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