Whirlwind Fan Company Manufactures Ceiling Fans and Uses an Activity-Based

Multiple Choice

Whirlwind Fan Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan has 20 separate parts. The direct material cost is $90, and each ceiling fan requires 2.50 hours of machine time to manufacture. Additional information is as follows: $$\begin{array} { | l | l | r | } \hline \text { Activity } & \text { Allocation Base } & \begin{array} { c } \text { Predetermined Overhead } \\\text { Allocation Rate }\end{array} \\\hline \text { Materials handling } & \text { Number of parts } & \$ 0.04 \\\hline \text { Machining } & \text { Machine hours } & 6.00 \\\hline \text { Assembling } & \text { Number of parts } & 0.20 \\\hline \text { Packaging } & \text { Number of finished units } & 2.50 \\\hline\end{array}$$ What is the cost of materials handling per ceiling fan? (Round any intermediate calculations and your final answer to two decimal places.)

A) $0.80
B) $6.00
C) $2.50
D) $6.25