Refer to the data given in problem 7.34. The company has implemented an activity-based costing system for its manufacturing overhead costs with the activity cost pools and activity diver data below:

Constellation plans to produce 1000 units of each model of fax machine.
Required:
1. For each activity, calculate the cost per unit of activity driver (e. g. the cost per setup).
2. Determine, under activity-based costing, the total overhead to be assigned to each product line.
3. Calculate, under activity-based costing, the overhead assigned per unit of each type of fax.
4. Prepare a table comparing the total product cost assigned to each type of fax machine using plantwide overhead rate, departmental overhead rates and activity-based costing. (This requirement relies on the solution to Problem 7.34.)

Transcribed Image Text:

Activity drivers Basic system product line 50 setups 30 000 kilograms 700 inspections 20 000 MH 3 000 EH Advanced system Activity cost $ 200 000 120 000 160 000 840 000 280 000 $1 600 000 Total 200 setups 80 000 kilograms 1600 inspections 60 000 MH* 7 000 EH" product line 150 setups 000 kilograms 900 inspections 40 000 MH 4000 EH Activity Machine setup Material receiving Inspection Machinery-related Engineering Total overhead