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-based cost for each disk drive unit is a.$130.69 b.$279.57 c.$394.12 d.$92.25
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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-based cost for each disk drive unit is
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