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