High-Tech Products manufactures three types of remote-control devices: Economy, Standard, and…
High-Tech Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.
Activity | Overhead Cost | Cost Driver |
Material handling | $225,000 | Number of parts |
Material insertion | 2,475,000 | Number of parts |
Automated machinery | 840,000 | Machine hours |
Finishing | 170,000 | Direct labour hours |
Packaging | 170,000 | Orders shipped |
$3,880,000 |
The following information pertains to the three product lines for next year:
Economy | Standard | Deluxe | |
Units to be produced | 10,000 | 5,000 | 2,000 |
Orders to be shipped | 1,000 | 500 | 200 |
Number of parts per unit | 10 | 15 | 25 |
Machine hours per unit | 1 | 3 | 5 |
Labour hours per unit | 2 | 2 | 2 |
What is High-Tech’s activity rate for material insertion?Question 16 options:
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