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:
