The Manoli Company has collected the following data for use in calculating produ
ID: 2546648 • Letter: T
Question
The Manoli Company has collected the following data for use in calculating product costs:
Activity Data: (expected and actual)
Rug Cleaners
Sweepers
Total
Units Produced
50,000
250,000
300,000
Prime Costs
$200,000
$750,000
$950,000
Direct Labor Hours
10,000
40,000
50,000
Machine Hours
20,000
10,000
30,000
Number of Setups
25
75
100
Inspection Hours
1200
,2,800
4,000
Number of Moves
140
210
350
Departmental Data: (expected and actual)
Molding
Assembly
Total
Direct Labor Hours
Rug Cleaners
5,000
5,000
10,000
Sweepers
Total
10,000
40,000
50,000
Machine Hours
Rug Cleaners
17,000
3,000
20,000
Sweepers
3,000
7,000
10,000
Total
20,000
10,000
30,000
Overhead Costs
Machining
$120,000
$30,000
$150,000
Moving Materials
40,000
30,000
70,000
Setting Up
70,000
10,000
80,000
Inspecting Products
20,000
30,000
50,000
Total
$250,000
$100,000
$350,000
What is the activity rate for moving materials?
$1000
0.2
$200
$800
Rug Cleaners
Sweepers
Total
Units Produced
50,000
250,000
300,000
Prime Costs
$200,000
$750,000
$950,000
Direct Labor Hours
10,000
40,000
50,000
Machine Hours
20,000
10,000
30,000
Number of Setups
25
75
100
Inspection Hours
1200
,2,800
4,000
Number of Moves
140
210
350
Explanation / Answer
Activity driver for moving material is number of moves which are 350 in total.
Activity rate =Total cost of moving material÷ number of moves
70000÷350= $200
Option c
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