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High-Tech Products manufactures three types of remote-control devices: Economy Standard, and Deluxe The company which uses activity-based costing, has identified five activities

High-Tech 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
Overhead 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 labour hours
Packaging 170,000 Orders shipped
  $3,880,000  


The following information pertains to the three product lines for next year:

  Economy Standard Deluxe
Units to be produced 10,000 5,000 2,000
Orders to be shipped 1,000 500 200
Number of parts per unit 10 15 25
Machine hours per unit 1 3 5
Labour hours per unit 2 2 2


What is High-Tech’s activity rate for material insertion?Question 16 options:

 

1)

$1.00 per part
 

2)

$6.62 per part
 

3)

$11 per part
 

4)

$145.59 per part

Feb 06 2020 View more View Less

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