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ABC components uses an activity based costing system for its product costing. For the last quarter, the following data relates to costs, output volume and
ABC components uses an activity based costing system for its product costing. For the last quarter, the following data relates to costs, output volume and cost drivers:
Overhead Costs Dollars
Machinery 172,000
Set ups 66,000
Materials Handling 45,000
Total 283,000
Product Information: A B C
Production and sales 4,000 units 3,000 2,000
Number of production runs 12 5 8
number of stores orders 12 6 4
If set up costs are driven by the number of production runs, what is the set up cost per unit traced to product A?
a. 7.92$
b. 7.00$
c. 16.50$
d. 7.33$
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