Figure 7-5. Rizzo Manufacturing produces two types of cameras: 35mm and digital.The cameras are produced using one continuous process.Four activities have been identified: machining,setups,receiving,and packing.Resource drivers have been used to assign costs to each activity.The overhead activities,their costs,and the other related data are as follows:
Refer to Figure 7-5.Using an activity rate for receiving based on receiving orders,assign receiving costs to the 35mm camera.
A)$1,800
B)$2,000
C)$1,600
D)$1,200
E)$4,000

Question

Figure 7-5. Rizzo Manufacturing produces two types of cameras: 35mm and digital.The cameras are produced using one continuous process.Four activities have been identified: machining,setups,receiving,and packing.Resource drivers have been used to assign costs to each activity.The overhead activities,their costs,and the other related data are as follows:
 Refer to Figure 7-5.Using an activity rate for receiving based on receiving orders,assign receiving costs to the 35mm camera.
A)$1,800 
B)$2,000 
C)$1,600 
D)$1,200 
E)$4,000

Quizplus · Accepted Answer

The activity rate for receiving is calculated as follows:
Total receiving costs / Total number of receiving orders
= $36,000 / 22,500 orders
= $1.60 per order

The number of receiving orders for the 35mm camera is given to be 1,000.

Therefore, the receiving cost for the 35mm camera is:
= $1.60 per order * 1,000 orders
= $1,600

Hence, the correct choice is C.