BUSINESS 9048 - Activity-Based Costing

Activity-Based Costing

An alternate method of assigning costs is activity-based costing. The major activity for the production of both Processor 01 and Android 01 is component assembly. There will be a total of 125,000 assemblies per year for the production of 500 units of Processor 01 and 300 units of Android 01 at a total cost of $25 million. Each unit of Android 01 will require 180 assemblies. The remaining cost for the production of Android 01 is for components, at $25,000 per unit.

Question 2:What would be the cost per unit of producing Android 01 using activity-based costing?

Be sure to show your calculations in Excel and provide a narrative that summarizes the results of your analysis and make recommendations for the benefit of company.