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Setup cost per unit

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Relating Cost Pools to Products Using Cost Drivers

Power Electronics manufactures portable power supply units. Power has recently decided to use an activity-based approach to cost its products. Production line setups is a major activity at Power. Next year Power expects to perform 1,000 setups at a total cost of $1,510,000. Power plans to produce 710 units of product EP150, which will require three setups. How much setup cost will be allocated to each unit of EP150 produced? (Round answer to 2 decimal places.)

Setup cost per unit of EP150 $

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The solution explains how to calculate the setup cost per unit.

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