Activity Based Costing
Question
OH's Related to Machine 2000
OH's Related to Labour 1000
Total 3000
X Y Total
Machine Hrs 100 200 300
Labour Hrs 200 100 300
a)Absorb on Machine Hrs
b)Absorb on labour hrs
Answer
a)
X= 10 100 1000 OAR= 3000
Y= 10 200 2000 300
10
b)
X= 10 200 2000 OAR= 3000
Y= 10 100 1000 300
10
Now through ABC
a)
X= 6.67 100 667 OAR= 2000
Y= 6.67 200 1334 300
6.666667
b)
X= 3.333333 200 666.6667 OAR= 1000
Y= 3.333333 100 333.3333 300
3.333333
Triple Ltd part b
D C P
Set up w1 25642.72 39318.84 164113.4 w1
Machinery w2 6300 7000 117600 229075
Material Handling w3 9817.5 17180.63 71176.88
Inspection w4 29452.5 35343 131554.5 341.903
Total Oh's 71212.72 98842.47 484444.8
Units 750 1250 7000
OH's/Unit 94.9503 79.07397 69.2064
Add Prime Cost 23 21 31
Cost/unit 117.9503 100.074 100.2064
Rounding Off 118 100 100
Dodo Ltd part b
A B C
Machining w1 23404.26 29255.32 2340.426 w1
Setup w2 36000 46800 7200 A 2
Receiving w3 13636.36 13636.36 2727.273 B 2
Packing w4 5000 5000 5000 C 2
Total OH's 78040.62 94691.68 17267.7
Units 20000 25000 2000 0.585106 /MH
Oh's/unit 3.902031 3.787667 8.633849
Add Prime cost 15 15 15
Cost/unit 18.90203 18.78767 23.63385
Selling Price 20 20 20
Profit 1.097969 1.212333 -3.633849
C with Ab cost no mood
*This is done through Ab costing
w2 MH/unit Production units w3 w4
D 1.5 750 1125 98175 196350
C 1 1250 1250
/Setup P 3 7000 21000 818.125 /material handeled 196.35 /inspection
23375
130900
5.6 /Machine HR
w2 w3
20000 40000 Total P.Runs 25 Receipts 22 Orders 60
25000 50000
2000 4000 3600 /P.Run 1363.636 /receipt 250
94000
/inspection
