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

Multiple Choice

Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system to allocate all manufacturing conversion costs.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 machining per cuckoo clock?

A) $5.00
B) $3.00
C) $10.50
D) $25.00