DeHart Technology, an Idaho manufacturer of printed circuit boards, has always estimated the support cost of its circuit boards with a 100% “markup” over its material costs. An activity analysis suggests that support costs are driven primarily by the number of manual operations performed on each board, estimated at $6 per manual operation. Compute the estimated support costs of the following two typical circuit boards using the traditional markup and the activity analysis results:

Why are the cost estimates different?

Transcribed Image Text:

Board Z15 $46.00 19 Board Q52 S65.00 Material cost Manual operations