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X-Ray Machines Ltd Assume That X-Ray Is Using a Volume-Based Costing System, and Superior

question 14

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X-Ray Machines Ltd. manufactures three product lines: Standard, Deluxe, and Superior. The company, which uses activity-based costing, has identified five activities (and related cost drivers) . Each activity, its budgeted cost, and related cost driver is identified below. The following information pertains to the three product lines for next year:  Standard  Deluxe  Supe rior  Units to be produced 15,00010,0007,000 Orders to be shipped 1,000500500 Number of parts per unit 101525 Machine hours per unit 357 Labour hours per unit 222\begin{array}{|l|r|r|r|}\hline & \text { Standard } & \text { Deluxe } & \text { Supe rior } \\\hline \text { Units to be produced } & 15,000 & 10,000 & 7,000 \\\hline \text { Orders to be shipped } & 1,000 & 500 & 500 \\\hline \text { Number of parts per unit } & 10 & 15 & 25 \\\hline \text { Machine hours per unit } & 3 & 5 & 7 \\\hline \text { Labour hours per unit } & 2 & 2 & 2 \\\hline\end{array} Assume that X-Ray is using a volume-based costing system, and the preceding manufacturing costs are applied to all products based on direct labour hours. How much of the preceding cost, rounded to the nearest dollar, would be assigned to Deluxe?

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Definitions:

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.

Working Capital Ratio

a financial metric that measures a company's ability to pay off its current liabilities with its current assets, an indicator of financial health.

Total Current Assets

The total value of all assets that are expected to be converted into cash within one year, including cash, inventory, and receivables.

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