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EgoDrone Inc. manufactures two models of Selfie Drones - small toy helicopters which follow users around taking aerial video while the user participates in extreme
EgoDrone Inc. manufactures two models of Selfie Drones - small toy helicopters which follow users around taking aerial video while the user participates in extreme sports. Whether the user is rafting down a raging river, or renewing their life insurance, all activities can be documented by the products two models: Sport or Pro. The company will use activity-based costing to apply its estimated $350,000 of overhead costs to its products. Information about its overhead follows: Activity (Cost Driver) Estimated MOH Expected Activity Total Sport Pro Assembly (Machine Hours) $40,000 5,000 3,000 2,000 Quality control (# of inspections) 110,000 550 250 300 Machine Setups (# of Setups) 200,000 200 70 130 $350,000 The following cost data is known: Sport Pro Direct Materials $300 $500 Direct Labour 50 80 Number of units produced 250 units 150 units Required: a) Compute the activity rates for each activity. b) Determine the expected unit cost of each product
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