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Discuss a basic case for a popular smart phone

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Testbank Exercise 2 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 $191,880 # of setups 820
Inspection 193,380 # of quality tests 530
Materials receiving 185,110 # of purchase orders 1,730

The budgeted data for smart phone case production are as follows.

Direct materials $2.60 per unit
Direct labor $0.61 per unit
Number of setups 97
Number of quality tests 433
Number of purchase orders 59
Production 18,000 units

Reference no: EM131757648

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