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Exercise # 04: EgoDrone Inc. manufactures two models of Selfie Drones - small toy helicopters which follow users around taking aerial video while the user
Exercise # 04: 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) Assembly (Machine Hours) Quality control (# of inspections) Machine Setups (# of Setups) Estimated MOH S40.000 110,000 200.000 $350.000 Expected Activity Total Sport 5.000 3,000 550 250 200 70 Pro 2.000 300 130 The following cost data is known: Sport Direct Materials Direct Labour Number of units produced $300 50 250 units Pro $500 80 150 units Required: a.) Compute the activity rates for each activity. b.) Determine the expected unit cost of each product
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