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What is the cost per unit of Cheap

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Question - Hi Tech Products manufactures three (3) types of CD players: Cheap, Econo and Deluxe. Hi Tech uses an activity-based product costing system. The company has identified five (5) activities. Each activity, its cost and related activity driver are identified below:

Activity Activity Cost Activity Driver

Material handling $225 000 Number of parts

Material insertion $2 475 000 Number of parts

Automated machinery $840 000 Machine hours

Finishing $170 000 Labour hours

Packaging $170 000 Orders shipped

Total manufacturing cost $3 880 000

The following information pertains to each product line of CD players:

Cheap Econo Deluxe

Units to be produced 10 000 5000 2000

Orders to be shipped 1000 500 200

Number of parts per unit 10 15 25

Machine hours per unit 1 3 5

Labour hours per unit 2 2 2

Under an activity-based product costing system, what is the cost per unit of Cheap?

Reference no: EM132550518

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