wilkerforce.xlsx - Question one Activity machine related...

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Question one Usage Activity valves pumps flow control rate of absorption per unit machine related expenses 3750 6250 1200 30 set up labor 10 50 100 250 receiving and production control 10 50 100 1125 engineering 250 375 625 80 packaging and shipping 10 70 220 500 manufacturing overheads Product cost valves pumps flow controllers Direct labor cost 75000 156250 40000 Direct material cost 120000 250000 88000 manufacturing overheads 151250 321250 333500 Total costs 346250 727500 461500 unit costs 46.2 58.2 115.4 Question two Both Methods valves pumps flow controllers ABC 46.2 58.2 115.4 Traditional 56 70 62 %change brought by using ABC 17.5 16.9 -86.1 ABC allocates costs to cost activities centres using cost drivers which are machine hours,set ups,production runs while traditional allocates costs to departments which are valves department,pump departmentand flow contro Differences in allocation of overhead of ABC allocates overheads as below Activity valves pumps flow controlers machine related expenses 112500 187500 36000
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  • Summer '16
  • Moses Thairu
  • flow controllers

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