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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 $386,100 Number of purchase orders
Scheduling 227,700 Number of production orders
Materials handling 428,200 Number of moves
Product development 766,000 Number of engineering changes
Production 1,467,100 Machine hours
Number of Purchase Orders Number of Production Orders Number of Moves Number of Engineering Changes Machine Hours Number of Units
Disk drives 3,970 330 1,430 13 1,600 1,700
Tape drives 2,500 195 650 4 9,700 4,500
Wire drives 11,800 910 3,500 24 10,800 2,900

The activity rate for the procurement activity cost pool is

a.$21.13 per purchase order

b.$66.38 per purchase order

c.$269.06 per purchase order

d.$158.68 per purchase order

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