Biology Forums - Study Force

Orlando Avionics makes three types of radios for small aircraftModel A, Model B, and Model C. The manufacturing operations are mechanized, and there is no direct labor. Manufacturing overhead costs are significant, and Orlando has adopted an activity-based costing system. Direct materials costs per unit for each model are as follows:

Model A   $20
Model B   $33
Model C   $36

Orlando has three activitiesassembly, materials management, and testing. The cost driver for assembly is machine hours. The cost driver for materials management is the number of parts, and the cost driver for testing is the number of units of product. Total costs and production volumes for the year were estimated as follows:

   Total cost   Allocation
Base   Cost Driver
Assembly   $792,000   123,750   Machine hours
Materials management   $136,000   80,000   Parts
Testing   $23,000   5,750   Units

The Model A radio requires 12 parts to construct and 20 machine hours of processing. What is the manufacturing cost to make one unit of Model A? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)
A) $168
B) $44
C) $172
D) $152

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This was certainly a tough question, loving the expertise