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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 $342,900 Number of purchase orders
Scheduling 219,900 Number of production orders
Materials handling 482,000 Number of moves
Product development 722,700 Number of engineering changes
Production 1,425,800 Machine hours
Number of Purchase Orders Number of Production Orders Number of Moves Number of Engineering Changes Machine Hours Number of Units
Disk drives 3,990 430 1,460 12 2,000 1,700
Tape drives 1,900 205 650 7 9,700 4,100
Wire drives 11,400 730 4,100 20 11,000 3,000

The activity rate for the procurement activity cost pool is

a.$62.81 per purchase order

b.$161.10 per purchase order

c.$251.21 per purchase order

d.$19.83 per purchase order

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