Ptech Ld. manufactures two models of smartphones The Quantum 9 has features designed for personal...
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Accounting
Ptech Ld. manufactures two models of smartphones The Quantum 9 has features designed for personal and family use. The Professional XP is designed for business and professional use. Data | |||||||
Quantum | Pro XP | ||||||
Expected production | 50,000 | 150,000 | |||||
Direct materials cost | $12.14 | $28.64 | |||||
Direct labour cost | $10.86 | $10.86 | |||||
The Indirect manufacturing cost has been estimated data of $1,629,000 and the company is considering implementing an activity-based costing system in its plant and has identified four primary activities. Data on these activities are as follows: | |||||||
Budgeted | |||||||
ACTIVITY | Quantum 9 | Pro XP | Cost | ||||
Equipment setup | 50 setups | 30 setups | $44,000 | ||||
Machine processing | 30,000 machine hours | 220,000 machine hours | $875,000 | ||||
Quality control | 5,000 inspection | 10,000 inspectors hours | 630,000 | ||||
Packaging and shipping | 125 shipments | 75 shipments | $80,000 | ||||
The company currently prices its products by adding a 65% markup to the total manufacturing cost. | |||||||
REQUIRED | |||||||
Compute the per-unit cost and selling price of both models of smartphones using an ABC costing system. |
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