Alpha Company Manufactures Breadboxes and Uses an Activity-Based Costing System

question 105

Multiple Choice

Alpha Company manufactures breadboxes and uses an activity-based costing system. The following information is provided for the month of May:
$\begin{array}{|l|r|r|r|}\hline &\text { Estimated Indirect }&&\text { Estimated Quantity of } \\\text { Activity } & \text { Activity Costs } & \text { Allocation Base } & \text { Allocation Base }\\\hline \text { Materials handling } & \$ 3,500 & \text { Number of parts } & 5,000 \text { parts } \\\hline \text { Assembling } & \$ 12,000 & \text { Number of parts } & 5,000 \text { parts } \\\hline \text { Packaging } & \$ 5,750 & \text { Number of bread boxes } & 1,250 \text { bread boxes } \\\hline\end{array}$

Each breadbox consists of 4 parts, and the direct materials cost per breadbox is $7.00.
-What is the cost of materials handling and assembling per breadbox?

• A) $4.60
• B) $17.00
• C) $14.40
• D) $12.40

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