Determine costs using Activity Based Costing System Green Vision manufactures a line of Virtual Reality Headsets and
Question:
Determine costs using Activity Based Costing System Green Vision manufactures a line of Virtual Reality Headsets and management has identified the following overhead costs and related cost drivers for the coming year:
Required:
Green Vision is trying to reduce its unit costs. Management believes that the two easiest areas to do this is in setup and power. Calculate thenew cost information for each of the following unrelated situations. [a] What are the new unit costs of each product if annual setup costs are reduced by 25%? [b] What is the new unit cost of each product if the number of setups for each product can be halved? [c] What is the new unit cost of each product if annual power costs are reduced by 70%? In a separate worksheet, show summary of the unit costs from both Part 1 and Part 2 for analysis. 3. Make another copy of original worksheet. In this worksheet will be extending the data and the answer section to include a third VR Headset line called Green, using the following information.
Calculate the total and unit cost for the new Headset line. |