Panamint Systems Corporation Is Estimating Activity Costs Associated with Producing

question 58

Multiple Choice

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are provided below. ​
-The activity rate for the product development cost pool is

• A)$73,000 per engineering change
• B)$8,588 per engineering change
• C)$30,417 per engineering change
• D)$16,222 per engineering change

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Definitions:

COGS

Cost of Goods Sold, which refers to the direct costs attributable to the production of the goods sold by a company.

Effective Annual Interest Rate

The actual return on an investment or the real cost of a loan, accounting for the compounding of interest over a year.

Line of Credit

A financial arrangement providing the borrower the right to draw funds up to a specified limit at any time within a fixed period.

Compensating Balance

A minimum account balance that a borrower is required to maintain as a condition of borrowing from a lender, often used to offset the cost of maintaining the loan.