Harald, Inc., has done a cost analysis for its production of bumper stickers.The following activities and cost drivers have been developed: Following are the actual costs of producing 85,000 stickers: 5,000 machine hours; 10 batches; 20 purchase orders

- What is the budgeted cost per sticker? (Round to three decimal places.)
A) $0.468
B) $0.478
C) $0.486
D) $0.487

Question

Harald, Inc., has done a cost analysis for its production of bumper stickers.The following activities and cost drivers have been developed:

Following are the actual costs of producing 85,000 stickers: 5,000 machine hours; 10 batches; 20 purchase orders
Harald, Inc., has done a cost analysis for its production of bumper stickers.The following activities and cost drivers have been developed: Following are the actual costs of producing 85,000 stickers: 5,000 machine hours; 10 batches; 20 purchase orders - What is the budgeted cost per sticker? (Round to three decimal places.) A) $0.468 B) $0.478 C) $0.486 D) $0.487

- What is the budgeted cost per sticker? (Round to three decimal places.)

- What is the budgeted cost per sticker? (Round to three decimal places.)
A) $0.468 
B) $0.478 
C) $0.486 
D) $0.487

Quizplus · Accepted Answer

To calculate the budgeted cost per sticker, we need to divide the total actual cost by the total number of stickers produced:

Total actual cost = Cost of machine hours + Cost of batches + Cost of purchase orders
= (5000 machine hours x $12 per hour) + (10 batches x $500 per batch) + (20 purchase orders x $150 per order)
= $60,000 + $5,000 + $3,000
= $68,000

Budgeted cost per sticker = Total actual cost / Number of stickers produced
= $68,000 / 85,000 stickers
= $0.478 per sticker

Therefore, the correct answer is B.