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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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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