Question

7. JU PUMUS LUVIY LUIS (LL) Pruuuces WU Camera lens models (L25C and L40R). The goal of this problem is to find the cost of these two models with activity-based costing. Through interviews, observations, and historical data, you determine the following information. Two departments are involved, Assembly and Packaging, that correspond to two cost pools. The ABC flow diagram displays the activities involved in each department and the Overhead Cost Pool Volumes. For each department, assume the following allocation of efforts to various activities: Department Activity % of Dept. Ffforts Assembly Assembling Set-up Machines 2394 Material Handling Packaging Inspecting & Packaging Shipping For each activity, assume the following cost drivers and volumes of each cost driver by product: Activity Assembling Set-up Machines Material Handling Volume by lens type Cost Driver 125C LAOR Total Machine-hours 6.000 16.000 Set-up hours 40 400 440 Number of Production 184048 Inspecting & Packaging Direct Laber hours 60,000 22.800|42,800 Shipping Number of shipments | 100 200 300 Assume the following Direct Costs by Product Type Direct Costs L25C LAOR Direct Material $1,200,000 $2.500.000 Direct Labor S1,750,000 $950,000 Total Direct Costs $3,450,000 $3,450,000 Find the unit cost for both products with Activity-Based Costing assuming production rates for L25C and L40R of 120,000 and 42.000 units, respectively.