Compute the unit cost of both the basic and deluxe toaster using both the unit-based approach, and the activity-based costing approach. Use the data and template provided in this file. Also, prepare sample budgeted income statements and balance sheets based on the costing data you calculated. You can make your own assumptions related to the number needed to complete these statements.
PopUp Company produces two types of toasters, basic and deluxe. For the current period, the company reports the following data:
| |
Basic Toaster |
Deluxe Toaster |
| Volume |
20,000 units |
5,000 units |
| Machine Hours |
1,000 |
2,400 |
| Batches |
315 |
125 |
| Engineering Modifications |
20 |
50 |
| Prime Costs |
$20,000 |
$30,000 |
| Market Price |
$25 per unit |
$60 per unit |
Additional Information Follows
| |
Costs |
Driver |
| Engineering Support |
$15,900 |
Engineering Modifications |
| Electricity |
25,000 |
Machine Hours |
| Setup costs |
33,900 |
Batches |
1) Compute the manufacturing cost per unit of each toaster using the current unit-based approach. Under this system costs are assigned to the toasters on the basis of machine hours.
2) Compute the manufacturing cost per unit of each toaster using an activy-based costing approach