ctice Gradebook ORION Downloadable eTextbook nment Megan Industries manufactures

Question

ctice Gradebook ORION Downloadable eTextbook nment Megan Industries manufactures several products including a basic case for a popular smart phone. The company is The company's production activibes, budgeted activity costs, and cost drivers for the coming year are asering adoting n activity-based costing approach for setting its budget Activity overhead Cost driver quantity Activity Cost driver Machine setup $228,810 196,350 # of setups # of quality tests 870 510 # of purchase orders Materials receiving 203,000 1,750 The budgeted data for smart phone case production are as follows. Direct materials Direct labor Number of setups $2.70 per unit $0.62 per 89 383 56 21,000 units unit Number of quality tests Calculate the activity rate for each cost pool per setup Machine setup per test Materials ndle

Explanation / Answer

(a) Calculate the activity rate for each pool: Machine setup $        263 per setup ($228,810/870) Inspection $        385 per test ($196,350/510) Material receiving $        116 per PO ($203,000/1,750)

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