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    L2 Example 3 &amp 4

    Uploaded by

    Ck Cheah
    The document provides an example of calculating overhead costs using activity-based costing for two products, A and B. It lists the activities, overhead costs, cost drivers and units for each product. The example shows setting up the calculations for allocating overhead costs to each product based on cost drivers like set-up times, labor hours and inspections. It provides additional production information on activities for products A and B to calculate the overhead cost per unit for each.

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    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd

    L2 Example 3 &amp 4

    Uploaded by

    Ck Cheah
    12 views2 pages
    The document provides an example of calculating overhead costs using activity-based costing for two products, A and B. It lists the activities, overhead costs, cost drivers and units for each product. The example shows setting up the calculations for allocating overhead costs to each product based on cost drivers like set-up times, labor hours and inspections. It provides additional production information on activities for products A and B to calculate the overhead cost per unit for each.

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    L2 Example 3 & 4

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    The document provides an example of calculating overhead costs using activity-based costing for two products, A and B. It lists the activities, overhead costs, cost drivers and units for each product. The example shows setting up the calculations for allocating overhead costs to each product based on cost drivers like set-up times, labor hours and inspections. It provides additional production information on activities for products A and B to calculate the overhead cost per unit for each.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    12 views2 pages

    L2 Example 3 &amp 4

    Uploaded by

    Ck Cheah
    The document provides an example of calculating overhead costs using activity-based costing for two products, A and B. It lists the activities, overhead costs, cost drivers and units for each product. The example shows setting up the calculations for allocating overhead costs to each product based on cost drivers like set-up times, labor hours and inspections. It provides additional production information on activities for products A and B to calculate the overhead cost per unit for each.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    of 2

    Example 3.

    0 (pg 24) Product A (100 units) Product B (200 units) Production OH: Set-up cost Imdirect Labour cost Inspection cost Total Activities: Machine set-up: Imdirect Labour-hours No of Inspection: 85 times 800 hours 1000 times $ 85,000 100,000 35,000 220,000

    ABC Calculation: Step 1: Identify major Activities & OH caost allocated per Activity Step 2: Identify appropriate Cost Driver & total CR units Step 3: Calculate cost per Cost Driver Rate (CDR)

    Production OH: Set-up cost Imdirect Labour cost Inspection cost Total

    $ 0 0 0 0

    0 0 0

    times hours times

    #DIV/0! $/set-up #DIV/0! $/hour #DIV/0! $/inspection

    Example 4.0 (pg 25) Further information Production (units) Machine set-up (times) Indirect labour (hours) Inspection (times)

    A 100 20 250 350

    B 200 65 550 650

    Step 4: Calculate OH caost to be allocated to each unit product A & B Cost Driver Units A Production OH: Set-up cost Imdirect Labour cost Inspection cost Total $ 0 0 0 0

    0 0 0

    times hours times

    #DIV/0! $/set-up #DIV/0! $/hour #DIV/0! $/inspection

    0 0 0

    OH Cost per unit: $/unit

    Cost Driver Units B

    OH Cost Allocated A B

    OH Cost Total

    0 0 0

    #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

    #DIV/0! #DIV/0! #DIV/0! #DIV/0!

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