Vaughn 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 Machine setup Inspection Materials receiving Activity Overhead $ $239.200 Direct materials Direct labor Number of setups Number of quality tests Number of purchase orders Production 213,200 The budgeted data for smartphone case production are as follows. Activity-based unit cost 407,400 $3.05 per unit $0.43 per unit 260 460 50 Cost Driver # of setups # of quality tests # of purchase orders 434,740 units Cost Driver Quantity 2.600 520 4,200 Calculate the activity-based unit cost of the smartphone case. (Round answer to 2 decimal places, eg 15.253
Vaughn 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 Machine setup Inspection Materials receiving Activity Overhead $ $239.200 Direct materials Direct labor Number of setups Number of quality tests Number of purchase orders Production 213,200 The budgeted data for smartphone case production are as follows. Activity-based unit cost 407,400 $3.05 per unit $0.43 per unit 260 460 50 Cost Driver # of setups # of quality tests # of purchase orders 434,740 units Cost Driver Quantity 2.600 520 4,200 Calculate the activity-based unit cost of the smartphone case. (Round answer to 2 decimal places, eg 15.253
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Vaughn 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
Machine setup
Inspection
Materials receiving
Direct materials
Direct labor
Activity Overhead $
$239.200
Number of setups
Number of quality tests
Number of purchase orders
Production
The budgeted data for smartphone case production are as follows.
Activity-based unit cost
213,200
407,400
$
$3.05 per unit
$0.43 per unit
260
460
50
Cost Driver
434,740 units
# of setups
# of quality tests
# of purchase orders
Cost Driver
Quantity
2.600
520
Calculate the activity-based unit cost of the smartphone case. (Round answer to 2 decimal places, eg 15.25)
4,200
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