Pittinger Company Manufactures Cuckoo Clocks and Uses an Activity-Based Costing

question 87

Multiple Choice

Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system.Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials,and requires 2.0 hours of machine time to produce.Additional information follows: $\begin{array}{|l|l|r|}\hline \text { Activity } & \text { Allocation Base } & \text { Cost Allocation Rate } \\\hline \text { Materials handling } & \text { Number of parts } & \$ 1.25 \text { per part } \\\hline \text { Machining } & \text { Machine hours } & \$ 2.50 \text { per machine hour } \\\hline \text { Assembling } & \text { Number of parts } & \$ 0.50 \text { per part } \\\hline \text { Packaging } & \text { Number of finished units } & \$ 1.50 \text { per finished unit } \\\hline\end{array}$
What is the cost of materials handling per cuckoo clock?

• A)$3.00
• B)$5.00
• C)$4.50
• D)$12.50