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Ringing Solutions produces 12,000 units of a cell phone. The production requires prime costs of $400,000, uses 2,500 machine hours, and takes 1,800 setup hours. The activity rates are $50 per machine hour and $130 per setup hour. What is the unit cost of a cell phone? (Note: Round answer to two decimal places.)

Respuesta :

Answer: $63.25

Explanation:

Total Cost = Prime cost + Machining Cost + Setup Cost

                 = $400,000 + (2500 × 50) + (1800 × 130)

                 = $400,000 + $125,000 + $234,000

                 = $759,000

Units = 12,000

unit cost of a cell phone:

[tex]=\frac{Total\ cost}{Units}[/tex]

[tex]=\frac{759,000}{12,000}[/tex]

 = $63.25

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