Question
Morrison Company manufactures two products: digital cameras and video cameras. The company uses an activity-based costing system. The annual production and sales volume of digital
Morrison Company manufactures two products: digital cameras and video cameras. The company uses an activity-based costing system. The annual production and sales volume of digital cameras is 10,000 units and of video cameras is 8,000 units. Direct costs for the digital cameras are $122; for the video cameras, direct costs are $153. For overhead costs, there are three activity cost pools with the following expected activities and estimated total costs:
Activity Cost Pool | Estimated Cost | Expected Activity Digital Cameras | Expected Activity Video Cameras | Total |
Activity 1 | $30,000 | 100 | 500 | 600 |
Activity 2 | $45,000 | 600 | 300 | 900 |
Activity 3 | $96,600 | 400 | 2,000 | 2,400 |
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Refer to Morrison Company. Using ABC, the total cost per digital camera is approximately:
Please show calculations!
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