Activity Base Costing Question?

Question

Estimated Costs   Est. Activities
Set-up (machine change overs)  20,000                  200
Engineering(hours)                    60,000                  500
Inspection (inspections)            30,000                   100

Here is what I need??
Cost for set up, engineering and inspection
Activity for set up, engineering and inspection
cost per activity for set up, engineering and inspection

During the year one of its product lines had the following reported results.

                        Actual                   
Set up               10                          
Engineering        200                    
Inspection          30        

Need cost for each(set up, engineering, inspection)                  
Quantity of units produced: 170
Total Cost: ??
Cost per Unit: ??   

Need answers where question marks!

adiwsusanto · Accepted Answer

This is very simple:

Estimated Cost for all 3 activities are 20,000; 60,000 and 30,000
Estimated activities for all 3 are 200 machine change overs; 500 engineering hours and 100 inspections.
Cost per activity? just divide them. So you will get 100, 120 & 300

Cost for each = 10 x 100 + 200 x 120 + 300 x 30 = 34,000 (TC)
Cost/ unit = 34,000/ 170 = 200
Got it?

Cheers...

Activity Base Costing Question?

1 Answer