Pitt Jones Company had the following activities, allocated costs, and allocation bas Activities Account inquiry (hours) $60,000 Account billing (dines) $30,000 Account verification (accounts) Corespondence Betters) All ocated Costs All ocation Base 2,000 hours 20,000 lines 20,000 accounts $15,000 $10,000 1,000 le tters The above activities are used by departments P and Q Department P 100 hours 10,000 lines Account verification (accounts) 1,000 accounts 50 letters Department Q 200 hours 7,000 lines 600 accounts 100 letters Account inquiry (hours) Account billing (lines) Corespondence (le tters) What is the cost per driver unit for the correspondence activity? $10.00 O $30.50 O $25.00 O $.75

Pitt Jones Company had the following activities, allocated costs, and allocation bas Activities Account inquiry (hours) $60,000 Account billing (dines) $30,000 Account verification (accounts) Corespondence Betters) All ocated Costs All ocation Base 2,000 hours 20,000 lines 20,000 accounts $15,000 $10,000 1,000 le tters The above activities are used by departments P and Q Department P 100 hours 10,000 lines Account verification (accounts) 1,000 accounts 50 letters Department Q 200 hours 7,000 lines 600 accounts 100 letters Account inquiry (hours) Account billing (lines) Corespondence (le tters) What is the cost per driver unit for the correspondence activity? $10.00 O $30.50 O $25.00 O $.75

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 8SQP

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1. A service station uses 2500 oil filters during the course of a year, and this usage is constant throughout the year. These oil filters are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per oil filter per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. a) What is the service station's optimal order quantity and total annual cost of inventory?
Metters Cabinets, Inc., needs to choose a productionmethod for its new office shelf, the Maxistand. To help accomplishthis, the firm has gathered the following production cost data: PROCESS TYPE ANNUALIZEDFIXED COST OFPLANT & EQUIP. VARIABLE COSTS (PER UNIT) ($)LABOR MATERIAL ENERGY MassCustomization $1,260,000 30 18 12Intermittent $1,000,000 24 26 20Repetitive $1,625,000 28 15 12Continuous $1,960,000 25 15 10Metters Cabinets projects an annual demand of 24,000 units forthe Maxistand. The Maxistand will sell for $120 per unit. a) Which process type will maximize the annual profit from pro-ducing the Maxistand? b) What is the value of this annual profit?
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