Panamint Systems Corporation Is Estimating Activity Costs Associated with Producing

question 31

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 procurement per purchase order.

• A) $43.53
• B) $18.50
• C) $15.42
• D) $37.00

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Definitions:

Transaction Motive

The need to hold cash for the purpose of conducting day-to-day business transactions.

Disbursement Activities

The process involving the payment of money from a fund or account, typically referring to the cash flow outgoing from a business or individual for expenses, investments, or other financial purposes.

Collection Activities

Actions taken by businesses or agencies to collect debts owed by customers or clients.

Total Collection Time

The total amount of time taken to collect payments from customers from the point of sale to the actual receipt of funds.