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 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 The activity rate for the scheduling activity cost pool is a.$20.00 per production order b.$29.41 per production order c.$10.42 per production order d.$200.00 per production order

Question

Business

Ashley Fuller

3 June, 07:02

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 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 The activity rate for the scheduling activity cost pool is a.$20.00 per production order b.$29.41 per production order c.$10.42 per production order d.$200.00 per production order

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Answers (1)

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Sage Short · Answer 1

The activity rate for the scheduling activity cost pool is

d. $200.00 per production order

Explanation:

Scheduling / Number of production orders

= $250,000 / 300+150+800 = $250,000/1250 = $ 200.00 per production order

Working

Panamint Systems Corporation

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

Disk drives Tape drives Wire drives

Number of Purchase Orders 4000 4000 12000

Number of Production Orders 300 150 800

Number of Moves 1400 800 4000

Number of Engineering Changes 10 10 25

Machine Hours 2000 8000 10,000

Number of Units 2000 4000 2500