Question Content Area Panamint Systems Corporation is estimating activity costs associated with producing disk...

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Accounting

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Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are as follows:

Line Item Description	Activity Cost	Activity Base
Procurement	$384,100	Number of purchase orders
Scheduling	221,400	Number of production orders
Materials handling	469,900	Number of moves
Product development	720,700	Number of engineering changes
Production	1,487,100	Machine hours

Line Item Description	Number of Purchase Orders	Number of Production Orders	Number of Moves	Number of Engineering Changes	Machine Hours	Number of Units
Disk drives	3,810	350	1,230	14	2,100	2,400
Tape drives	1,800	125	520	7	8,200	4,100
Wire drives	11,700	980	3,700	26	11,400	2,900

The activity-based cost (rounded to the nearest cent) for each disk drive unit is

a. $22.19

b. $251.02

c. $188.56

d. $657.82

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