HiTech Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.
| Activity |
Cost |
Cost Driver |
| Material handling |
$277,000 |
Number of parts |
| Material insertion |
3,270,000 |
Number of parts |
| Automated machinery |
874,000 |
Machine hours |
| Finishing |
197,000 |
Direct labor hours |
| Packaging |
197,000 |
Orders shipped |
| |
|
|
| Total |
$4,815,000 |
|
| |
|
|
The following information pertains to the three product lines for next year:
| |
Economy |
Standard |
Deluxe |
| Units to be produced |
19,400 |
8,700 |
2,000 |
| Orders to be shipped |
1,130 |
760 |
285 |
| Number of parts per unit |
10 |
20 |
30 |
| Machine hours per unit |
1 |
3 |
6 |
| Labor hours per unit |
2 |
2 |
2 |
1. Required information What is HiTech's pool rate for the material-handling activity closest to?
$9.19 per part. A rate other than those listed above. $0.65 per part. $1.43 per part. $4.60 per labor hour.
2. Required information What is HiTech's pool rate for the automated machinery activity closest to?
$15.70 per labor hour. A rate other than those listed above. $52.42 per unit. $15.20 per machine hour. $51.00 per machine hour.
3. Required information What is HiTech's pool rate for the finishing activity closest to?
$3.27 per machine hour. A rate other than those listed above. $3.27 per unit. $3.27 per labor hour. $5.77 per unit.