Answer:
Wieters Industries
a. Activity Rates:
Machine setup = $250
Inspection = 300
Materials receiving 140
b. The activity-based unit cost of the smartphone case is:
= $13.04
Explanation:
a) Data and Calculations:
Activity Activity Overhead $ Cost Driver Cost Driver Quantity
Machine setup $200,000 # of setups 800
Inspection 120,000 # of quality tests 400
Materials receiving 252,000 # of purchase orders 1,800
Total overhead costs $572,000
Activity Rates:
Machine setup = $250 ($200,000/800)
Inspection = 300 ($120,000/400)
Materials receiving 140 ($252,000/1,800)
Budgeted data for smartphone case production:
Direct materials $2.50 per unit
Direct labor $0.54 per unit
Number of setups 92
Number of quality tests 400
Number of purchase orders 50
Production 15,000 units
Overhead Applied to Smartphone Case:
Number of setups 92 * $250 = $ 23,000
Number of quality tests 400 * $300 = 120,000
Number of purchase orders 50 * $140 = 7,000
Total overhead applied = $150,000
Overhead per unit = $10 ($150,000/15,000)
Unit Cost of Smartphone Case:
Direct materials per unit $2.50
Direct labor per unit $0.54
Overhead per unit $10.00
Total unit cost = $13.04
