ABC Company manufactures three products: A,B and C. Products A and B are manufactured in-batches...
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ABC Company manufactures three products: A,B and C. Products A and B are manufactured in-batches of ten units. Product C is a high-value product that is manufactured in single units. In a typical month, production comprises 500 units of A,400 of B and 20 of C. The quality control department has to inspect each unit immediately after the batch or single unit is produced. The department costs a total of $5,020 per month to run. This is broken down as follows: - Setting up test equipment: $2,200 - Inspection $2,820 Once set up, the equipment can test up to ten units before it has to be recalibrated. Each unit of A and B requires the same amount of time for inspection Each unit of C requires twice as much inspection time. ABC Company has an activity-based management system. What is the cost per unit of quality control for each unit of C under this system
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