Solution-Calculate the activity rate for each cost pool

Calculate the activity rate for each cost pool

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Reference no: EM131116039

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	$217,600	# of setups	850
Inspection	149,930	# of quality tests	470
Materials receiving	177,620	# of purchase orders	1,660

The budgeted data for smart phone case production are as follows.

Direct materials	$2.80	per unit
Direct labor	$0.64	per unit
Number of setups	85
Number of quality tests	394
Number of purchase orders	61
Production	18,720	units

(a) Calculate the activity rate for each cost pool.

(b) Calculate the activity-based unit cost of the smart phone case.

Reference no: EM131116039

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Calculate the activity rate for each cost pool

Reference no: EM131116039

Reference no: EM131116039

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