Panamint Systems Corporation Is Estimating Activity Costs Associated with Producing

question 54

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 four separate activity pools. The budgeted activity cost and activity base data by product are provided below.
Determine the activity rate for product development per change.

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

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Definitions:

Modified Accelerated Cost Recovery

A tax depreciation system in the United States that allows the accelerated write-off of property under certain categories for tax purposes.

Tax Act of 1989

Legislation enacted to amend, revise, or change the tax laws existing at that time, specific to a given jurisdiction.

Depreciation Method

A methodical strategy for distributing the expense of a physical asset across its lifespan.

Straight-line Method

A method of allocating an asset's cost evenly over its useful life for the purposes of calculating depreciation.