Question
5.3 Wu Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production process is automated, and the company has
5.3
Wu Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production process is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The company has identified five major activities involved in producing the keyboards.
| Activity | Allocation Base | Allocation Rate | |||
| Materials receiving & handling | Cost of material | 2 % of material cost | |||
| Production setup | Number of setups | $ | 50.00 | per setup | |
| Assembly | Number of parts | $ | 2.50 | per part | |
| Quality inspection | Inspection time | $ | 0.75 | per minute | |
| Packing and shipping | Number of orders | $ | 10.00 | per order | |
Activity measures for the two kinds of keyboards follow:
| Labor Cost | Material Cost | Number of Setups | Number of Parts | Inspection Time | Number of Orders | |||||||||||||
| Laptops | $ | 630 | $ | 3,000 | 30 | 42 | 3,600 | min. | 65 | |||||||||
| Desktops | 575 | 2,400 | 12 | 24 | 2,500 | min. | 20 | |||||||||||
Required
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Compute the cost per unit of laptop and desktop keyboards, assuming that Wu made 500 units of each type of keyboard. (Round your answers to 2 decimal places.)
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Audit Effectiveness Meeting The IT Challenge
Authors: Kamil Omoteso
1st Edition
1409434680, 978-1409434689
