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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
