Quality Stereo Company has provided the following information regarding its activity-based costing system:
.Purchasing department costs are allocated based on purchase orders and the cost allocation rate is $75 per purchase order.
.Assembly department costs are allocated based on the number of parts used and the cost allocation rate is $1.00 per part.
.Packaging department costs are allocated based on the number of units produced and the allocation rate is $2.00 per unit produced.
Each stereo produced has 50 parts and the direct materials cost per unit is $70. Quality Stereo has an order for 1,000 stereos which will require 50 purchase orders. What is the selling price per unit assuming that Quality Stereo adds a 20% markup to total cost?
A) $66.90
B) $146.40
C) $148.50
D) $150.90

Question

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The Answer of Quality Stereo Company has provided the following information regarding its activity-based costing system:
.Purchasing department costs are allocated based on purchase orders and the cost allocation rate is $75 per purchase order.
.Assembly department costs are allocated based on the number of parts used and the cost allocation rate is $1.00 per part.
.Packaging department costs are allocated based on the number of units produced and the allocation rate is $2.00 per unit produced.
Each stereo produced has 50 parts and the direct materials cost per unit is $70. Quality Stereo has an order for 1,000 stereos which will require 50 purchase orders. What is the selling price per unit assuming that Quality Stereo adds a 20% markup to total cost?
A) $66.90
B) $146.40
C) $148.50
D) $150.90

Quality Stereo Company Has Provided the Following Information Regarding Its