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. Calculate an activity rate for packing based on packing orders.
A) $9.00 per packing order
B) $10.00 per packing order
C) $8.00 per packing order
D) $60.00 per packing order
E) $1.20 per packing order

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. Calculate an activity rate for packing based on packing orders.
A) $9.00 per packing order 
B) $10.00 per packing order 
C) $8.00 per packing order 
D) $60.00 per packing order 
E) $1.20 per packing order

Quizplus · Accepted Answer

The activity rate for packing is calculated by dividing the total cost of packing by the number of packing orders. If the total cost and number of orders are such that the division results in $10.00 per order, then B is correct.