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?

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Definitions:

Delivery

The process of transporting goods from one place to another or the act of transferring the possession of something.

Checking Account

A bank account that allows easy access to funds, typically through checks or electronic transactions, and is used for day-to-day expenses.

Payee

A person or entity who is to receive money.

Drawer

In banking and finance, the person or entity that writes a check or draft instructing a drawee to pay a specified sum to a third party.