Rick Young, the controller of Buckeye Electronics, wishes to use activity-based costing for a new circuit board
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Rick Young, the controller of Buckeye Electronics, wishes to use activity-based costing for a new circuit board produced for personal comput- ers. Young has identified the following activities associated with circuit board pro- duction and the related conversion costs forecast for the period:
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Activity Purchasing of parts, Starting the product Inserting the components. Soldering the boards... Testing the quality Conversion Cost $ 72,000 60,000 150,000 180,000 140,000 The cost drivers that Young intends to use, as well as the amounts of activity forecast for the period, are: Activity Purchasing of parts. Starting the product. Inserting the components Soldering the boards. Testing the quality Cost Driver Number of parts purchased Number of boards started Number of insertions Number of boards soldered Number of testing hours Cost Driver Amounts 12 per board 60,000 10 per board 60,000 2,000 Each circuit board has anticipated direct materials costs of $46. In addition, each circuit board takes on average 15 minutes to test. Required: Determine the cost of a circuit board produced by Buckeye Electronics.
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Related Book For
Managerial Accounting
ISBN: 9780538842822
9th Edition
Authors: Harold M. Sollenberger, Arnold Schneider, Lane K. Anderson
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