Question

Bramble Industries manufactures several products including a basic case for a popular smartphone. 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		$ 231,140			# of setups			910
Inspection		120,870			# of quality tests			395
Materials receiving		299,700			# of purchase orders			2,025

The budgeted data for smartphone case production are as follows.

Direct materials		$3.00 per unit
Direct labor		$0.44 per unit
Number of setups		101
Number of quality tests		455
Number of purchase orders		45
Production		15,000 units

Calculate the activity rate for each cost pool. (Round answers to 0 decimal places, e.g. 5,275.)

Machine setup		$ / setup
Inspection		$ / test
Materials receiving		$ / PO

Calculate the activity-based unit cost of the smartphone case. (Round answer to 2 decimal places, e.g. 15.25.)

Activity-based unit cost

$

Answer 1

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