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A manufacturer of mobile phones has identified two models for analysis under activity-based costing. Each model is associated with two activity pools: Soldering and Assembly.
A manufacturer of mobile phones has identified two models for analysis under activity-based costing. Each model is associated with two activity pools: Soldering and Assembly. Model J requires 14 solders, and Model P requires 24 solders. Total direct laborhours required for Models J and P are 0.35 per unit and 1.15 per unit, respectively. Factory overhead amounting to $550,000 is assigned as follows: $375,000 to the Soldering cost pool and the balance to the Assembly cost pool. The cost driver for Soldering is the number of solders, and the cost driver for Assembly is direct labor hours. Furthermore, $295,000 of product design overhead is also allocated to these two product lines and is split equally between them. What is the factory overhead cost per driver unit for Soldering if the company manufactures 500,000 phones, of which 65% are Model J?
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