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Basic Toaster Deluxe Toaster Volume 20,000 units 5,000 units Machine Hours 1,000 2,400 Batches 315 125 Engineering Modifications 20 50 Prime Costs $20,000 $30,000 Market
Basic Toaster | Deluxe Toaster | |
Volume | 20,000 units | 5,000 units |
Machine Hours | 1,000 | 2,400 |
Batches | 315 | 125 |
Engineering Modifications | 20 | 50 |
Prime Costs | $20,000 | $30,000 |
Market Price | $25 per unit | $60 per unit |
Costs | Driver | ||
Engineering Support | $15,900 | Engineering Modifications | |
Electricity | 25,000 | Machine Hours | |
Setup costs | 33,900 | Batches |
Prepare a 2-3 page memo addressed to the CFO summarizing your findings, and why you believe the activity-based costing method gives you more useful information to make decisions for the company. Include in the memo at least 4 ratios that you feel highlight your position that activity-based costing is more useful. | |||
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