Tops Music Company manufactures compact disc changers that are installed in the trunks of vehicles. Tops Music Company uses activity-based costing and has been asked to bid on 30,000 CD changers to be installed on a fleet of Ford Expeditions. Cost information follows: Allocation Base Total Cost $18,000 Cost Allocation Rate $ 45.00 per purchase order 1.30 per part 3.50 per finished unit Activity Purchasing 400 Assembling Packaging Total Overhead Cost 18 23.4 105,000 $123.023.4 30000 Each CD changer requires 18 parts, and direct materials cost of $21.50. A total of 400 purchase orders will be necessary if Tops Music Company bid is accepted. a. Compute the total cost of the 30,000 CD changers. b. Compute the average cost per unit| c. Assumes Tops Music Company adds a 30% markup to total cost, determine the total price the company will bid for the Ford Expedition order.
Tops Music Company manufactures compact disc changers that are installed in the trunks of vehicles. Tops Music Company uses activity-based costing and has been asked to bid on 30,000 CD changers to be installed on a fleet of Ford Expeditions. Cost information follows: Allocation Base Total Cost $18,000 Cost Allocation Rate $ 45.00 per purchase order 1.30 per part 3.50 per finished unit Activity Purchasing 400 Assembling Packaging Total Overhead Cost 18 23.4 105,000 $123.023.4 30000 Each CD changer requires 18 parts, and direct materials cost of $21.50. A total of 400 purchase orders will be necessary if Tops Music Company bid is accepted. a. Compute the total cost of the 30,000 CD changers. b. Compute the average cost per unit| c. Assumes Tops Music Company adds a 30% markup to total cost, determine the total price the company will bid for the Ford Expedition order.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Tops Music Company manufactures compact disc changers that are installed in the trunks of
vehicles. Tops Music Company uses activity-based costing and has been asked to bid on
30,000 CD changers to be installed on a fleet of Ford Expeditions. Cost information follows:
Cost Allocation Rate
$ 45.00 per purchase
order
1.30 per part
3.50 per finished unit
Activity
Purchasing
Allocation Base
Total Cost
400
$18,000
Assembling
Packaging
Total Overhead Cost
18
23.4
30000
105,000
$123.023.4
Each CD changer requires 18 parts, and direct materials cost of $21.50. A total of 400 purchase
orders will be necessary if Tops Music Company bid is accepted.
a. Compute the total cost of the 30,000 CD changers.
b. Compute the average cost per unit,
C. Assumes Tops Music Company adds a 30% markup to total cost, determine the total price
the company will bid for the Ford Expedition order.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F71ad4cd6-aa40-4f01-8be4-1b991bff5c19%2Fbe08a70d-6dd2-477a-8b8e-cfff35208b2a%2Fupw2sg_processed.png&w=3840&q=75)
Transcribed Image Text:Tops Music Company manufactures compact disc changers that are installed in the trunks of
vehicles. Tops Music Company uses activity-based costing and has been asked to bid on
30,000 CD changers to be installed on a fleet of Ford Expeditions. Cost information follows:
Cost Allocation Rate
$ 45.00 per purchase
order
1.30 per part
3.50 per finished unit
Activity
Purchasing
Allocation Base
Total Cost
400
$18,000
Assembling
Packaging
Total Overhead Cost
18
23.4
30000
105,000
$123.023.4
Each CD changer requires 18 parts, and direct materials cost of $21.50. A total of 400 purchase
orders will be necessary if Tops Music Company bid is accepted.
a. Compute the total cost of the 30,000 CD changers.
b. Compute the average cost per unit,
C. Assumes Tops Music Company adds a 30% markup to total cost, determine the total price
the company will bid for the Ford Expedition order.
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