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The budgeted overheads and cost driver volumes of XYZ are as follows.
Cost Pool
BudgetedOverheads (Rs.)
Cost Driver
Budgeted Volume
Material procurement
5,80,000
No. of orders
1,100
Material handling
2,50,000
No. of movements
680
Set-up
4,15,000
No. of set ups
520
Maintenance
9,70,000
Maintenance hours
8,400
Quality control
1,76,000
No. of inspection
900
Machinery
7,20,000
No. of machine hours
24,000
The company has produced a batch of 2,600 components of AX-15, its material cost was Rs. 1,30,000 and labor cost Rs. 2,45,000. The usage activities of the said batch are as follows.
Material orders & 26, maintenance hours & 690, material movements & 18, inspection & 28, set ups & 25, machine hours & 1,800
Calculate & cost driver rates that are used for tracing appropriate amount of overheads to the said batch and ascertain the cost of batch of components using Activity Based Costing.
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