Management Accounting

Week 7 [Topic 6) (10 marks) Hi Tech Products manufactures three {3) types of CD players: Cheap, Econo and Deluxe. Hi Tech uses an activity-based product costing system. The company has identied five (5) activities. Each activity, its cost and related activity driver are identified below: Activity Activity Cost Material handling $225 000 Material insertion $2 475 000 Automated machinery $840 000 Finishing $170 000 Packaging $170 000 Total manufacturing cost $3 880 000 The following information pertains to each product line of CD players: Cheap Econo Deluxe Units to be produced 10 000 5000 2000 Orders to be shipped 1000 500 200 Number of parts per unit 10 15 25 Machine hours per unit 1 3 5 Labour hours per unit 2 2 2 Activity Driver Number of parts Number of parts Machine hours Labour hours Orders shipped Under an activity-based product costing system, what is the cost per unit of Cheap