Reference no: EM131759784

Compute the unit cost of both the basic and deluxe toaster using both the unit-based approach, and the activity-based costing approach. Use the data and template provided in this file. Also, prepare sample budgeted income statements and balance sheets based on the costing data you calculated. You can make your own assumptions related to the number needed to complete these statements.

PopUp Company produces two types of toasters, basic and deluxe. For the current period, the company reports the following data:

	Basic Toaster	Deluxe Toaster
Volume	20,000 units	5,000 units
Machine Hours	1,000	2,400
Batches	315	125
Engineering Modifications	20	50
Prime Costs	$20,000	$30,000
Market Price	$25 per unit	$60 per unit

Additional Information Follows

	Costs	Driver
Engineering Support	$15,900	Engineering Modifications
Electricity	25,000	Machine Hours
Setup costs	33,900	Batches

1) Compute the manufacturing cost per unit of each toaster using the current unit-based approach. Under this system costs are assigned to the toasters on the basis of machine hours.

2) Compute the manufacturing cost per unit of each toaster using an activy-based costing approach