Figure 7-5.Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:

-Refer to Figure 7-5. Using an activity rate for receiving based on receiving orders, assign receiving costs to the 35mm camera.
A) $1,800
B) $2,000
C) $1,600
D) $1,200
E) $4,000

Question

Figure 7-5.Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:
 
-Refer to Figure 7-5. Using an activity rate for receiving based on receiving orders, assign receiving costs to the 35mm camera.
A) $1,800 
B) $2,000 
C) $1,600 
D) $1,200 
E) $4,000

Quizplus · Accepted Answer

According to the information given, the total cost of the receiving activity is $16,000 and the number of receiving orders is 10, resulting in an activity rate of $1,600 per receiving order. The number of receiving orders for the 35mm camera is 1, so the receiving cost for the 35mm camera is $1,600. Therefore, the correct answer is C.