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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:
Material handling Material insertion Automated machinery Finishing
Total manufacturing cost
Activity Cost
$225 000 $2 475 000 $840 000 $170 000 $170 000 $3 880 000
Activity Driver
Number of parts Number of parts Machine hours Labour hours Orders shipped
The following information pertains to each product line of CD players:
Units to be produced Orders to be shipped Number of parts per unit Machine hours per unit Labour hours per unit
10 000 1000 10
Econo Deluxe
5000 2000 500 200 15 25
3 5
Under an activity-based product costing system, what is the cost per unit of Cheap?
2 2

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