Solution-Allocate the inspection cost between the two

Allocate the inspection cost between the two products

Reference no: EM132602576

Question - Wayne Company makes two types of circuit boards. One is a high-caliber board designed to accomplish the most demanding tasks; the other is a low-caliber board designed to provide limited service at an affordable price. During its most recent accounting period, Wayne incurred Rs.170,000 of inspection cost. When Wayne recently established an activity-based costing system, its activities were classified into four categories. Categories and appropriate cost drivers follow (20)

	Direct Labor Hours	Number of Batches	Number of Inspectors	Number of Square Feet
High caliber	3,000	20	3	30,000
Low caliber	14,000	20	2	70,000
Total	17,000	40	5	100,000

Required - Allocate the inspection cost between the two products assuming that it is driven by (a) unit-level activities, (b) batch-level activities, (c) product-level activities, or (d) facility-level activities. Note that each allocation represents a separate alternative. In other words, the Rs.170,000 of inspection cost will be allocated four times, once for each cost driver.

Reference no: EM132602576

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Allocate the inspection cost between the two products

Reference no: EM132602576

Reference no: EM132602576

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