Question

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	$337,000		Number of purchase orders
Scheduling	219,300		Number of production orders
Materials handling	478,900		Number of moves
Product development	798,300		Number of engineering changes
Production	1,477,600		Machine hours

	Number of Purchase Orders	Number of Production Orders	Number of Moves	Number of Engineering Changes	Machine Hours	Number of Units
Disk drives	4,190	420	1,310	11	2,100	1,700
Tape drives	1,600	185	670	7	8,900	4,200
Wire drives	12,200	820	3,600	20	11,300	2,700

The activity-based cost for each tape drive unit is

a.$18.73

b.$368.1

c.$678.72

d.$203.03

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.