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Assignment
Megan Industries manufactures several products including a basic case for a popular smart phone. The company is considering adopting an activity-based costing approach for setting its budget. The company's production activities, budgeted activity costs, and cost drivers for the coming year are as follows.
Activity
Activity overhead $
Cost driver
Cost driver quantity
Machine setup
$164,250
# of setups
730
Inspection
153,900
# of quality tests
450
Materials receiving
174,420
# of purchase orders
1,710
The budgeted data for smart phone case production are as follows.
Direct materials
$2.70 per unit
Direct labor
$0.57 per unit
Number of setups
95
Number of quality tests
400
Number of purchase orders
55
Production
20,750 unit
Calculate the activity-based unit cost of the smart phone case.
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