ABC International LTD produces two types of industrial compressors: standard and upgraded The company provided...
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Accounting
ABC International LTD produces two types of industrial compressors: standard and upgraded The company provided the following information: Standard Upgraded Sales units 5,000 3,000 Sales price per unit $600 $1000 Direct materials cost per unit $400 $600 $70 $100 Direct labor cost per unit Number of machines hours per unit 3 Sales and marketing as percentage of total revenue 1% 1.5% Administration as percentage of total cost of labor 20% 20% The company groups its overhead activities under three categories as follows: Activity Total costs Total machining costs $270,000 Sales and marketing $75,000 Administration $130,000 Required: Calculate the cost of a standard and an upgraded compressor (per unit) under the activity-based costing system
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