90.2K

Verified Solution

Link Copied!

Exercise 7.29 Skysong Company uses an activity-based costing system. It has the following manufacturing activity areas, related drivers used as allocation bases, and cost allocation ates Cost Allocation Rate $ 70 Cost Activity Driver Machine setup Material handling Machining Assembly Inspectiorn Number of setups Number of parts Machine hours Direct labour hours Number of finished units 0.5 27 23 During the month, 90 units were produced, requiring 2 setups. Each unit consisted of 21 parts and used 1.6 direct labour hours and 1.25 machine hours. Direct materials cost $100 per finished unit. All other manufacturing costs are classifled as conversion costs. ABC costs for research and marketing costs are $140 per unit. All other nonmanufacturing ABC costs are $380 per unit. Calculate the manufacturing cost per unit for the period. (Round answer to 2 decimal places, e.g. 52.75.) Cost per unit LINK TO TEXT LINK TO TEXT Calculate the total cost (manufacturing and nonmanufacturing costs) per unit for the period. (Round answer to 2 decimal places, e.g. 52.75.) Total cost per unit LINK TO TEXT LINK TO TEXT Suppose Skysong Company's managers want to implement target costing. Under target costing, the managers need to determine the amount of cost savings that must be achieved to earn a desired level of profit. If they must set a competitive price of $715.61 and require a 10% profit based on the total cost calculated in the previous part, how much cost savings must they generate? (Round answer to 2 decimal places, e.g. 52.75.) Cost savings required LINK 10 ltX1 LINK IOIEXI

Answer & Explanation Solved by verified expert

See Answer