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Author Question: Megan Industries manufactures several products including a basic case for a popular smart phone. The ... (Read 101 times)

eboni

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on: Feb 5, 2023
Megan Industries manufactures several products including a basic case for a popular smart phone. The company is considering adopting an activity-based costing approach to set its budget. The company's production activities, budgeted activity costs, and cost drivers for the coming year are as follows.

ActivityActivity Overhead CostCost DriverCost Driver Quantity
Machine setup$192,000# of setups   800
Inspection   175,000# of quality tests   500
Materials receiving   198,000# of purchase orders1,800
The budgeted data for smart phone case production are as follows.

Direct materials$2.60 per unit
Direct labor$0.59 per unit
Number of setups90
Number of quality tests400
Number of purchase orders60
Production20,000 units
Required:

a.Calculate the activity rate for each cost pool.
b.Calculate the activity-based unit cost of the smart phone case.
Managerial Accounting ¦ Davis ¦ 4th Edition
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Marked as best answer by eboni on Feb 5, 2023

heathercab

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Reply #1 on: Feb 5, 2023
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eboni

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Reply 2 on: Feb 5, 2023
Excellent

at

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Reply 3 on: Yesterday
Gracias!

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