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What is the cost per unit of cheap

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Reference no: EM132542883

Hi Tech Products manufactures three (3) types of CD players: Cheap, Econo and Deluxe. Hi Tech uses an activity-based product costing system. The company has identified five (5) activities. Each activity, its cost and related activity driver are identified below:

Activity                                       Activity Cost                              Activity Driver

Material handling                           $225 000                      Number of parts

Material insertion                             $2 475 000                    Number of parts

Automated machinery                      $840 000                         Machine hours

Finishing                                         $170 000                        Labour hours

Packaging                                          $170 000                          Orders shipped

Total manufacturing cost                       $3 880 000

The following information pertains to each product line of CD players:

                                                    Cheap                  Econo                        Deluxe

Units to be produced                        10000                 5000                       2000

Orders to be shipped                         1000                    500                          200

Number of parts per unit                        10                     15                            25

Machine hours per unit                          1                          3                          5

Labour hours per unit                              2                             2                        2

Question 1: Under an activity-based product costing system, what is the cost per unit of Cheap?

Reference no: EM132542883

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