Ace Manfacturing Identifies the following activities and drivers for its operati

Question

Ace Manfacturing Identifies the following activities and drivers for its operations:
Moving: Number of moves: 200 Machining: Machine Hours: 10,000
Ace estimates Moving Materials and Machining will cost 1,600,000 and 3,000,000 respectively. Ace’s activity rates are:
A. $800 per move and $3,000 per machine hour. B. $8,000 per move and $300 per machine hour. C. $8 per move and $30 per machine hour. D. $80 per move and $3 per machine hour. Ace Manfacturing Identifies the following activities and drivers for its operations:
Moving: Number of moves: 200 Machining: Machine Hours: 10,000
Ace estimates Moving Materials and Machining will cost 1,600,000 and 3,000,000 respectively. Ace’s activity rates are:
A. $800 per move and $3,000 per machine hour. B. $8,000 per move and $300 per machine hour. C. $8 per move and $30 per machine hour. D. $80 per move and $3 per machine hour.
Moving: Number of moves: 200 Machining: Machine Hours: 10,000
Ace estimates Moving Materials and Machining will cost 1,600,000 and 3,000,000 respectively. Ace’s activity rates are:
A. $800 per move and $3,000 per machine hour. B. $8,000 per move and $300 per machine hour. C. $8 per move and $30 per machine hour. D. $80 per move and $3 per machine hour.

Explanation / Answer

Activity rate for Moving=Respective cost/Respective activity

=(1,600,000/200)=$8000 per move

and for Machining=$3,000,000/10,000=$300 per machine hour

Hence the correct option is B.

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