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Ignore any calculations from prior questions. Information pertaining to Radakovich Corporation's estimated manufacturing overhead for 2022 is given below. Radakovich uses an activity-based costing
Ignore any calculations from prior questions. Information pertaining to Radakovich Corporation's estimated manufacturing overhead for 2022 is given below. Radakovich uses an activity-based costing (ABC) system to assign manufacturing overhead to products. Among its products is G12B, that the company only manufactures for special orders. BobCo Inc. has requested a bid on 1,000 units of G12B. Radakovich's production managers estimate the order to require 200 machine-hours, 5,000 parts, and 384 inspection-hours. This product's direct materials are estimated to cost $40.00 per unit and direct labor is estimated at $60.00 per unit. Activity Activity Rate Cost Driver Assembly $30.00 Material Handling $2.00 number of machine hours number of parts Inspection $75.00 number of inspection-hours Activity Rates are quoted per unit of cost driver activity. A Radakovich engineer has suggested that a new software program that could save 20 percent of the inspection costs on the BobCo order. If the software costs $3,500 what is the net cost savings if the software is purchased and used on this order? (Round to the nearest $1.00)
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