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Required information Problem 9-57 (Static) Activity-Based Costing: Analysis and Visualization (LO 9-5, 6) [The following information applies to the questions displayed below.] Clairepoint Medical
Required information Problem 9-57 (Static) Activity-Based Costing: Analysis and Visualization (LO 9-5, 6) [The following information applies to the questions displayed below.] Clairepoint Medical Devices, Incorporated (CMDI) makes three types of a diagnostic device. For internal purposes, these models are referred to as Alpha, Beta, and Gamma, respectively. Although they are designed to provide the same information, the models differ by the quality of the materials and their electronic capabilities. The Alpha model is a relatively simple device that requires more manual data entry and retrieval. The Gamma model automates much of the interface with the user. As a purveyor of certain medical devices, including these models, CMDI requires certification for each model, regardless of the number of units sold. CMDI computes product costs by allocating all manufacturing overhead to products based on direct labor costs. After attending a seminar on financial analysis, the chief marketing officer (CMO) of CMDI asked the plant controller about ABC and whether it could be used for the costing of these three models. To respond to the request, the controller collected the following information for the upcoming period: Activity: Obtaining certificates. Handling materials Setting up Engineering Assuring quality Shipping Recommended Cost Driver Number of certificates. Direct materials cost Production runs Number of units Estimated Cost $ 105,000 204,750 155,500 320,000 Number of inspections 104,000 220,000 $ 1,109,250 Production runs Product-line information for the upcoming period follows: Number of units produced Direct materials cost (total) Alpha 2,500 $212.500 Beta 1,000 Gamma $ 145.000 500 $130,000
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