Question
Orlando Avionics makes three types of radios for small aircraftlong Model A, Model B, and Model C. The manufacturing operations are mechanized, and there is
Orlando Avionics makes three types of radios for small aircraftlong Model
A, Model B, and Model C. The manufacturing operations are mechanized, and there is no direct labor. Manufacturing overhead costs aresignificant, and Orlando has adopted an activity-based costing system. Direct materials costs per unit for each model are as follows:
Model A $20
Model B $33
Model C $36
Orlando has three
activitieslong dashassembly,
materials management, and testing. The cost driver for assembly is machine hours. The cost driver for materials management is the number of parts, and the cost driver for testing is the number of units of product. Total costs and production volumes for the year were estimated as follows:
Total cost | Allocation Base | Cost Driver | |
Assembly | $792,000 | 123,750 | Machine hours |
Materials management | $136,000 | 80,000 | Parts |
Testing | $23,000 | 5,750 | Units |
The Model A radio requires 12 parts to construct and 20 machine hours of processing. What is the manufacturing cost to make one unit of Model A? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)
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