Activity-Based Budget (LO2)

Macon Industries has the following budget information available for February:

Units manufactured ....................................... 20,000

Factory administration ..................................... $45,000

Assembly ............................................... hour per unit 3 $8

Direct materials .......................................... 2 pounds per unit 3 $3

Inspection............................................... $200 per batch of 1,000 units

Manufacturing overhead ................................... $3 per unit

Product development...................................... $15,000

Setup cost .............................................. $10 per batch of 1,000 units

Required

Use activity based costing to prepare a manufacturing cost budget for February. Clearly distinguish

between unit, batch, and facility-level costs