Andiamo Manufacturing produces two types of tablets: basic and deluxe. The tablets 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:
$$\begin{array} { l r r r r }
\text { Product } & \text { Machine Hours } & \text { Setups } & \text { Receiving Orders } & \text { Packing Orders } \
\text { basic } & 20,000 & 200 & 100 & 800 \
\text { deluxe } & 20,000 & 500 & 400 & 4,000 \
\text { Costs } & \$ 80,000 & \$ 60,000 & \$ 10,000 & \$ 30,000
\end{array}$$
-Refer to the Figure.What is the activity rate for packing that is based on packing orders?
A)$1.20 per packing order
B)$6.25 per packing order
C)$9.00 per packing order
D)$10.00 per packing order

Question

Andiamo Manufacturing produces two types of tablets: basic and deluxe. The tablets 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:
 $$\begin{array} { l r r r r } 
\text { Product } & \text { Machine Hours } & \text { Setups } & \text { Receiving Orders } & \text { Packing Orders } \
\text { basic } & 20,000 & 200 & 100 & 800 \
\text { deluxe } & 20,000 & 500 & 400 & 4,000 \
\text { Costs } & \$ 80,000 & \$ 60,000 & \$ 10,000 & \$ 30,000
\end{array}$$
-Refer to the Figure.What is the activity rate for packing that is based on packing orders?
A)$1.20 per packing order
B)$6.25 per packing order
C)$9.00 per packing order
D)$10.00 per packing order

Quizplus · Accepted Answer

The activity rate for packing is calculated by dividing the total packing costs by the total number of packing orders. The total packing costs are $30,000, and the total number of packing orders is 800 (basic) + 4,000 (deluxe) = 4,800. Therefore, the activity rate for packing is $30,000 / 4,800 = $6.25 per packing order.

Andiamo Manufacturing Produces Two Types of Tablets: Basic and Deluxe