In: Accounting
HiTech Products manufactures three types of remote control devices Economy. Standard and Deluxe The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below
Activity | Cost | Cost 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 | Direct labor hours |
Packaging | 170,000 | Orders shipped |
Total | $3,880,000 |
The following information pertains to the three product lines for next year:
Units to be produced | Economy | Standard | Deluxe |
---|---|---|---|
Orders to be shipped | 10,000 | 5,000 | 2,000 |
Number of parte per unit | 1,000 | 500 | 200 |
Machine hours per unit | 1 | 3 | 5 |
Labor hours per unit | 2 | 2 | 2 |
17. Under an activity-based costing system, what is the per-unit cost of Economy?
A $164. B. $141 C. $225. D. $228. E. An amount other than those listed above.
18. Assume that HiTech is using a volume-based costing system, and the preceding manufacturing costs are applied to all products based on direct labor hours. How much of the preceding cost would be assigned to Deluxe?
A $456,471 B $646.471 $961,176. D $1,141,176 E An amount other than those listed above.