AC 50 - Question Megan Industries manufactures several...

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Question: 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 $210,800 # of setups 850 Inspection 182,280 # of quality tests 490 Materials receiving 216,960 # of purchase orders 1,920 The budgeted data for smart phone case production are as follows. Direct materials
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Unformatted text preview: $2.80 per unit Direct labor $0.54 per unit Number of setups 96 Number of quality tests 425 Number of purchase orders 59 Production 21,530 units (a) Calculate the activity rate for each cost pool. Machine setup $ per setup Inspection $ per test Materials receiving $ per PO Answer: Calculations A B C = A / B Particulars Cost Driver Activity overhead $ Cost driver quantity Cost driver rate Machine setup $ per setup 210800 850 248.00 Inspection $ per test 182280 490 372.00 Materials receiving $ per PO 216960 1920 113.00 Queston: The end...
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  • Spring '15
  • Accounting, #, Cost driver, $2.80, $210,800, $0.54

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