Activity Based Costing
Autor: Peng Jiang • September 6, 2017 • Coursework • 1,465 Words (6 Pages) • 792 Views
Cost analysis and applications (ACCT1064 / ACCT1068 / ACCT2242)
Week 6 | Topic: Activity based costing Questions to be discussed: Question 6.22 and Question 6.27 |
Question 6-22 Activity-based costing, manufacturing
- Simple costing system:
Total indirect costs = A$95 000 + A$45 000 + A$25 000 + A$60 000 + A$8 000 + 3%[(A$125 × 3200) + (A$200 × 1800)]
= A$255 800
Total machine-hours = 5500 + 4500
= 10 000
Indirect cost rate per machine-hour = A$255 800[pic 1]10 000
= A$25.58 per machine-hour
Simple Costing System | Interior | Exterior |
Direct materialsa | A$ 96 000 | A$ 81 000 |
Direct manufacturing labourb | 76 800 | 64 800 |
Indirect cost allocated to each job (A$25.58 × 5 500; 4 500 machine hours) | 140 690 | 115 110 |
Total costs | A$313 490 | A$260 910 |
Total cost per unit (A$313 490 ÷ 3 200; A$260 910 ÷ 1 800) | A$ 97.97 | A$ 144.95 |
aA$30 × 3200 units; A$45 × 1800 units
bA$16 × 1.5 × 3200 units; A$16 × 2.25 × 1800 units
- Activity-based costing system:
Activity (1) | Total Cost of Activity (2) | Cost Driver (3) | Cost Driver Quantity (4) | Allocation Rate (5) = (2) ÷ (4) |
Product scheduling | A$95 000 | production runs | 125c | A$ 760.00 per production run |
Material handling | A$ 45 000 | material moves | 240d | A$ 187.50 per material move |
Machine setup | A$ 25 000 | machine setups | 200e | A$ 125.00 per setup |
Assembly | A$ 60 000 | machine hours | 10 000 | A$ 6.00 per machine hour |
Inspection | A$ 8 000 | inspections | 400f | A$ 20.00 per inspection |
Marketing | selling price | A$ 0.03 per dollar of sales |
c40 + 85 = 125; d72 + 168 = 240; e45 + 155 = 200; f250 + 150 = 400
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