Activity-based costing approach for setting its budget

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Reference no: EM131203712

Megan Industries manufactures several products including a basic case for a popular smart phone. 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 Activity overhead $ Cost driver Cost driver quantity Machine setup $193,390 # of setups 830 Inspection 201,400 # of quality tests 530 Materials receiving 229,670 # of purchase orders 1,930 The budgeted data for smart phone case production are as follows. Direct materials $2.80 per unit Direct labor $0.57 per unit Number of setups 99 Number of quality tests 394 Number of purchase orders 62 Production 18,480 units Collapse question part (a) Calculate the activity rate for each cost pool. Machine setup $ per setup Inspection $ per test Materials receiving $ per PO

Reference no: EM131203712

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