Prepare a 2-3 page memorandum to the CFO of Digitales Supersnicos S.A summarizing your findings, and why you think the job order-based cost method gives

Prepare a 2-3 page memorandum to the CFO of Digitales Supersónicos S.A summarizing your findings, and why you think the job order-based cost method gives you more useful information to make decisions for the company. Include in the memo at least 4 reasons why you think activity-based costing is more useful. Like any text document, it must follow the APA 7 format and include the memorandum within the content section.

Calculation of Cost per Unit:

	Chip Ultra Nitido	Chip Virtual Reality
Prime Cost	$67,250	$81,400
Overhead Cost	$63,057	$95,603
	($67.80 * 930)	($67.80*1410)
Total Cost of Manufacturing	$130,307	$177,003
Total Units Produced	52000	62500
Cost per Unit	$2.51	$2.83

Allocation of Overhead Cost using ABC Method:

	Chip Ultra Nitido	Chip Virtual Reality
Preparation Cost	$39,693	$47,707
	($87400*104/229)	($87400*125/229)
Electricity Cost	$6,717	$10,183
	($16900*930/2340)	($16900*1410/2340)
Engineering Support	$19,888	$34,472
	($54360*45/123)	($54360*78/123)
Total Overhead Cost	$66,297	$92,363

Calculation of Cost per unit of each product:

	Chip Ultra Nitido	Chip Virtual Reality
Prime Cost	$67,250	$81,400
Overhead Cost	$66,297	$92,363
Total Cost of Manufacturing	$133,547	$173,763
Total Units Produced	52000	62500
Cost per Unit	$2.57	$2.78

Cost per unit of the products under two methods:

	Chip Ultra Nitido	Chip Virtual Reality
Process Based Costing Method	$2.51	$2.83
Activity-Based Costing Method	$2.57	$2.78