Question

Wieters Industries manufactures several products including a basic case for a popular smartphone. The company is considering adopting an activity-based costing approach for setting its budget. The company's production activities, budgeted activity costs, and cost drivers for the coming year are as follows.


The budgeted data for smartphone case production are as follows.
Direct materials ........ $2.50 per unit
Direct labor ......... $0.54 per unit
Number of setups ........ 92
Number of quality tests ..... 400
Number of purchase orders... 50
Production.......... 15,000 units

Required
a. Calculate the activity rate for each cost pool.
b. Calculate the activity-based unit cost of the smartphonecase.


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  • CreatedFebruary 21, 2014
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