FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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:
Activity Cost
Activity Base
Procurement
Scheduling
$370,000
Number of purchase orders
250,000
Number of production orders
Materials handling
Product development
Production
500,000 Number of moves
730,000
1,500,000
Number of engineering changes
Machine hours
Number of Number of Number
Number of
Number
Purchase
Production
of
Engineering
Machine
of
Orders
Orders
Moves
Changes
Hours
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-based cost (rounded to the nearest cent) for each wire drive unit is
O
a. $744.06
Ob. $204.13
Oc. $173.51
Od. $394.12
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Transcribed Image Text: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: Activity Cost Activity Base Procurement Scheduling $370,000 Number of purchase orders 250,000 Number of production orders Materials handling Product development Production 500,000 Number of moves 730,000 1,500,000 Number of engineering changes Machine hours Number of Number of Number Number of Number Purchase Production of Engineering Machine of Orders Orders Moves Changes Hours 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-based cost (rounded to the nearest cent) for each wire drive unit is O a. $744.06 Ob. $204.13 Oc. $173.51 Od. $394.12
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