Discuss a basic case for a popular smart phone

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Testbank Exercise 2 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 \$191,880 # of setups 820 Inspection 193,380 # of quality tests 530 Materials receiving 185,110 # of purchase orders 1,730

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

 Direct materials \$2.60 per unit Direct labor \$0.61 per unit Number of setups 97 Number of quality tests 433 Number of purchase orders 59 Production 18,000 units

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