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Scott Cameras Produces Digital Cameras and Have Decided to Switch

Question 84

Essay

Scott Cameras produces digital cameras and have decided to switch from a volume-based system to an activity-based system. Scott produced 100,000 digital cameras in the most recent quarter and has determined that their total activity costs were: $3,000,000 of materials cost, $500,000 of labor costs, $50,000 of inspection costs, and $500,000 of packaging costs. It takes 30 minutes of labor to produce each camera, inspections are done for 20% of all cameras produced, and cameras are packaged individually.
Required:
What are the driver rates for each activity?

Correct Answer:

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Materials Cost = $3,000,000 / 100,000 = ...

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