Case Study - Classic Pen Company - ACTIVITY BASED COSTING CLAS Traditional Income statement Sales Material Costs Direct Labour [email protected] Total

Case Study - Classic Pen Company - ACTIVITY BASED COSTING...

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ACTIVITY BASED COSTING Traditional Income statementBlueBlackRed PurpleTotalSales7500060000139501650150600Material Costs2500020000468055050230Direct Labour100008000180020020000Overhead @300%3000024000540060060000Total Operating Cost6500052000118801350130230Total Income100008000207030020370Return on sales13.3%13.3%14.8%18.2%13.5%Direct Cost and Activity DriversBlueBlackRed PurpleTotalProducation Sales Volume500004000090001000100000Unit Selling Price1.51.51.51.5Material Unit Cost0.50.50.520.55Direct Labor hrs/unit0.020.020.020.022000Machine hrs/unit0.10.10.10.110000Production runs50503812150Setup Time/run4164Total Setup Time (hours)2005022848526Part Adminitration11114
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ExpenseExpense CategoryExpenseIndirect Labour20000Fringe Benefits16000Computer Systems10000Machinery8000Maintenance4000Energy2000Total60000Resources Cost PoolsIndirect labourDL Fringe BenefitComputer System ExpensesMachine ExpensesTotal200008000800010000800040002000280008000100001400060000
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ABC Cost per Unit vs Selling Price per UnitBlueBlackRed PurpleABC Cost/Unit1.181.162.234.95Selling Price/Unit1.51.51.551.65Note: 1. ABC Cost/Unit = Total Operation Cost Each Product / Production Unit Each Product 2. Selling Price/Unit = Sales Each Product / Production Unit Each Product
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