Crisson Company makes two models of phones - Blue and Yellow. Blue is a basic model and Yellow has more advanced features. Data on the two phones is a follows:

Blue Yellow

Expected production 50,000 phones 150,000 phones

Direct Materials and Direct Labour costs $25 $40

Crisson Company's accountant prepares the following budget that she plan to use to prepare an activity based analysis of the costs of Blue and Yellow:

Blue Yellow Budgeted Costs

Equipment setup 100 setups 60 set ups $88,000

Machine processing 60,000 machine hrs 440,000 machine hrs $1,750,000

Quality Control 10,000 inspection hrs 20,000 inspection hrs $1,260,000

Packaging/shipping 250 Shipments 150 Shipments $240,000

Required:

1. Calculate the manufacturing overhead allocation rate for each activity using ABC

2. Calculate the cost of the Blue Phone

3. If the company wants a markup on cost of 75% calculate the selling price of the Blue phone.