Part 2: Use the activity-based information below to calculate the cost of each unit of product...

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Part 2: Use the activity-based information below to calculate the cost of each unit of product using machine setups instead of machine hours. Cost Driver Number of Machine Setups Operating Machines Number of Sales Orders Received Number of Units Shipped Cost $12,000 $4,000 $4,000 $8,000 Basic 3 Setups .3 MH 20 Orders 1,000 Units Squirrel- Proof 4 Setups .5 MH 40 Orders 2,000 Units Deluxe 5 Setups .4 MH 45 Orders 1,800 Units Write a paper, no more than one page in length, that discusses the following: What are your observations when you compare the results for each method? Which do you think is more accurate and why? Based on your results, would you recommend the firm change the level of production for any category and why? Part 2: Use the activity-based information below to calculate the cost of each unit of product using machine setups instead of machine hours. Cost Driver Number of Machine Setups Operating Machines Number of Sales Orders Received Number of Units Shipped Cost $12,000 $4,000 $4,000 $8,000 Basic 3 Setups .3 MH 20 Orders 1,000 Units Squirrel- Proof 4 Setups .5 MH 40 Orders 2,000 Units Deluxe 5 Setups .4 MH 45 Orders 1,800 Units Write a paper, no more than one page in length, that discusses the following: What are your observations when you compare the results for each method? Which do you think is more accurate and why? Based on your results, would you recommend the firm change the level of production for any category and why?

Answer rating: 100% (QA)

To calculate the cost of each unit of product using activitybased costing ABC we must allocate the costs based on the cost drivers for each activity The table shows the costs for each cost driver and ... View the full answer