Cold Storage manufactures 5,000 fridges. Cold Storage currently uses a conventional (absoption) costing system which uses one indirect cost pool using product output (number of standard and superior fridges manufactured) to allocate costs.

The following information regarding overhead costs is as follows:

Indirect cost Cost ($)

Purchasing 375,000

Machine set-up 300,000

Machining 900,000

Quality control 250,000

Calculate the cost per fridge based on the number of fridges manufactured.

Cost driver	Standard	Superior	Total
PO	2500	3750	6250
number of machine setup	1200	1800	3000
Machine Hours	4500	6750	11250
Number of inspections	2000	3000	5000

Activity	Cost Driver	Total overhead Cost $
Purchasing	Purchase Order (PO)	375000
Machine Setup	Number of machine setup	300000
Machining	machine hour	900000
Quality Control	number of inspection	250000