Beauty Beyond Words Salon uses an activity-based costing system to determine the cost of services. The salon has determined the costs of services by activity and activity usage as follows:
-Graham Company wants to reduce activity costs by $0.30 per unit. The setup activity for a batch of 100 units of Part RR110 currently costs $80 per setup. A process engineer proposes reengineering the setup activity so that it takes 60% of the original cost per setup. By how much will this reduce activity costs per unit? Will more cost savings need to be found?
A)$0.53; no
B)$0.48; no
C)$0.32; no
D)$0.22; yes

Question

Beauty Beyond Words Salon uses an activity-based costing system to determine the cost of services. The salon has determined the costs of services by activity and activity usage as follows:   ​
-Graham Company wants to reduce activity costs by $0.30 per unit. The setup activity for a batch of 100 units of Part RR110 currently costs $80 per setup. A process engineer proposes reengineering the setup activity so that it takes 60% of the original cost per setup. By how much will this reduce activity costs per unit? Will more cost savings need to be found?
A)$0.53; no 
B)$0.48; no 
C)$0.32; no 
D)$0.22; yes

Quizplus · Accepted Answer

The Answer of Beauty Beyond Words Salon uses an activity-based costing system to determine the cost of services. The salon has determined the costs of services by activity and activity usage as follows:   ​
-Graham Company wants to reduce activity costs by $0.30 per unit. The setup activity for a batch of 100 units of Part RR110 currently costs $80 per setup. A process engineer proposes reengineering the setup activity so that it takes 60% of the original cost per setup. By how much will this reduce activity costs per unit? Will more cost savings need to be found?
A)$0.53; no 
B)$0.48; no 
C)$0.32; no 
D)$0.22; yes

Beauty Beyond Words Salon Uses an Activity-Based Costing System to Determine