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Megan Industries manufactures several products including a basic case for a popular smart phone. The company is considering adopting an activity-based costing approach for setting
Megan Industries manufactures several products including a basic case for a popular smart phone. The company is considering adopting an activity-based costing approach for setting its budget. The company's production activities, budgeted activity costs, and cost drivers for the coming year are as follows. Activity Machine setup Inspection Materials receiving Activity overhead $ Cost driver $174.790 # of setups 199.680 #of quality tests 210.600 # of purchase orders Cost driver quantity 770 520 1.950 The budgeted data for smart phone case production are as follows. Direct materials Direct labor Number of setups Number of quality tests Number of purchase orders Production $2.80 per unit $0.64 per unit 88 360 58 20,670 units (a) Calculate the activity rate for each cost pool. Machine setup per setup $ per test Inspection Materials receiving $ per PO Save for Later (b) The parts of this question must be completed in order. This part will be available when you complete the part above
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