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!

Answer 1

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...