Step 2: Activity-Based Costing

An alternate method of assigning costs is activity-based costing. The major activity for the production of both Processor01 and Android01 is component assembly. There will be a total of 125,000 assemblies per year for the production of 500 units of Processor01 and 300 units of Android01 at a total cost of $25 million. Each unit of Android01 will require 180 assemblies. The remaining cost for the production of Android01 is for components, at $25,000 per unit.

Question 2: What would be the cost per unit of producing Android01 using activity-based costing?

Submit your Activity-Based Costing Report and Calculations to the dropbox below. Be sure to show your calculations in Excel and provide a narrative analysis in PowerPoint. Your narrative analysis should summarize the results of your analysis and make recommendations for the benefit of company.

Before you submit your assignment, review the competencies below, which your instructor will use to evaluate your work. A good practice would be to use each competency as a self-check to confirm you have incorporated all of them in your work.

3.1 Identify numerical or mathematical information that is relevant in a problem or situation.

3.2 Employ mathematical or statistical operations and data analysis techniques to arrive at a correct or optimal solution.

3.3 Analyze mathematical or statistical information, or the results of quantitative inquiry and manipulation of data.

3.4 Employ software applications and analytic tools to analyze, visualize, and present data to inform decision-making.

10.5 Develop operating forecasts and budgets and apply managerial accounting techniques to support strategic decisions.