Compute the activity-based unit cost of the smart phone case

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Homework

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 per unit

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

Reference no: EM131193774

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