Dundas Company uses an activity-based costing system. Consider the following information:

During the past month, 60 units of a component were produced. Three setups were required. Each unit needs 35 parts, 4 direct labour hours, and 6 machine hours. Direct materials cost $140 per finished unit. All other costs are classified as conversion costs.
REQUIRED
If the company would like its gross margin to be 35% of sales, what price should it charge per unit of the component (rounded to the nearest dollar)?

Transcribed Image Text:

Manufacturing Activity Area Machine setup Material handling Milling Assembly Cost Driver Used as Application Base Number of setups Number of parts Machine hours Direct labour hours Cost per Unit of Conversion Application Base $180 $ 15 $ 50 300