Reference no: EM133326666
The company has implemented an activity-based costing system for its manufacturing overhead costs with the activity cost pools and activity driver data below.
| Activity |
Activity Cost ($) |
Total |
Activity Drivers |
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Basic system |
Advanced system |
| Machine set up |
100 000 |
200 setup |
50 setup |
150 setup |
| Material receiving |
60 000 |
80 000 kilograms |
30 000 kilograms |
50 000 kilograms |
| Inspection |
80 000 |
1600 inspections |
700 inspections |
900 inspections |
| Engineering |
140 000 |
7 000 EH |
3 000 EH |
4 000 EH |
| Total Overhead |
800 000 |
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| MH = Machine hours |
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| EH = Engineering hours |
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Southern Cross plans to produce 1 000 units of each model of fax machine
Overhead Rates per Department
- Basic System
Department A = 130 per unit
Department B = 210 per unit
- Advanced System
Department A = 390 per unit
Department B = 100 per unit
Product cost based on Department Overhead Costs
- Basic System = 1,040 per unit
- Advanced System = 1,560 per unit
- Basic System = 1,144
- Advanced System = 1,716
The overhead costs be as follows:
- Basic System = 340 per unit
- Advanced System = 460 per unit
Question:
Make a table comparing the total product cost assigned to each type of fax machine using a plantwide overhead rate, department overhead rates and activity-based costing.
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