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 $321,400 Number of purchase orders Scheduling $209,300 Number of production orders Materials handling $471,600 Number of moves Product development $797,200 Number of engineering changes Production $1,463,600 Machine hours Number of Purchase Orders Number of Production Orders Number of Moves Number of Engineering Changes Machine Hours Number of Units Disk drives 3,810 430 1,380 15 1,900 2,000 Tape drives 2,100 175 650 7 9,300 3,800 Wire drives 11,500 990 4,500 20 11,700 2,700 Determine the activity rate for procurement per purchase order.

Answer 1

Answer:

803.5 Activity rate

Explanation:

Determine the activity rate for procurement per purchase order.

321,400 Procurement cost

430 Number of purchase order

Any other data is irrelevant, we only need procurement cost and the number of purchase order.

$cost\div driver = rate$

321,400 / 430 = 803.5

803.5 Activity rate