Analyze Skidmore Electronics

Skidmore Electronics manufactures consumer electronic products. The company has three assembly labor classifications, S-1, S-2, and S-3. The three classifications are paid $15, $18, and $22 per hour, respectively. The assembly activity for a new smartphone is as follows:

ActivityActivity-Base

Usage

(hrs. per unit)

xActivity Rate per

Hour (S-2)=Activity CostAssembly0.40$18.00$7.20

A product engineer proposes using a higher-rated employee to perform the assembly on the new phone. His analysis has shown that an S-3 employee can perform the assembly in 0.35 hour per unit.

a.Determine the Assembly activity cost using the S-3 labor classification.Round your answers to two decimal places.

ActivityActivity-Base

Usage

(hrs. per unit)

xActivity Rate per

Hour (S-3)=Activity CostAssembly$$b.Is the product engineer's proposal supported?