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| Topic: |
Business
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| Number of pages / Number of words: |
3 / 612 |
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Then, the rate per setup would be $52,000 / 52 setups, or $1,000 per setup. Now allocating setup costs to each of the products yields the following:
X1: 50 setups x $1,000 per setup, or $50,000;
X2: 2 setups x $1,000 per setup, or $2,000.
As such, X1 is now carrying its share of the setup costs it truly drives! On a per-unit basis, the revised allocation causes the reported cost of X1 to go up by $2...
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Then, the rate per setup would be $52,000 / 52 setups, or $1,000 per setup. Now allocating setup costs to each of the products yields the following:
X1: 50 setups x $1,000 per setup, or $50,000;
X2: 2 setups x $1,000 per setup, or $2,000.
As such, X1 is now carrying its share of the setup costs it truly drives! On a per-unit basis, the revised allocation causes the reported cost of X1 to go up by $2...
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