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Megan Industries manufactures several products including a basic case for a popular smart phone. The company is considering adopting an activity-based costing approach for setting its budget. The company’s production activities, budgeted activity costs, and cost drivers for the coming year are as follows.



ActivityActivity overhead $Cost driverCost driver quantity
Machine setup$164,250# of setups730
Inspection153,900# of quality tests450
Materials receiving174,420# of purchase orders1,710


The budgeted data for smart phone case production are as follows.



Direct materials$2.70per unit
Direct labor$0.57per unit
Number of setups95
Number of quality tests400
Number of purchase orders55
Production20,750units
 

 

Calculate the activity-based unit cost of the smart phone case.

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