Question: 1. calculate the activity rate for each cost activity 2. calculate the total manufacturing costs of the 15,000 smartphones (hint: total direct material costs =
7-8 Calculating product costs using activity-based costing (CIMA adapted) (LO 2) Wieters Industries manufactures several products including a basic case for a pop- ular 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. Activity Overhead $ Activity Machine setup Inspection Materials receiving $ 200,000 120,000 252,000 Cost Driver # of setups # of quality tests # of purchase orders Cost Driver Quantity 800 400 1,800 The budgeted data for smartphone case production are as follows. Direct materials Direct labor Number of setups Number of quality tests Number of purchase orders Production $2.50 per unit $0.54 per unit 92 400 50 15,000 units
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