# Tutorial 5 Answer - THE UNIVERSITY OF NEW SOUTH WALES...

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1 THE UNIVERSITY OF NEW SOUTH WALES SCHOOL OF ACCOUNTING ACCT2522 Management Accounting 1 Session 1, 2009 Tutorial Week 5 - Managing Cost II: Activity Based Costing Suggested Solutions Solution for Tutorial Question Cost per event for each cost driver: Soldering \$880 000 ÷ 1 600 000 = \$.55 per solder joint Shipments 836 000 ÷ 19 000 = 44.00 per shipment Quality control 1 170 000 ÷ 78 000 = 15.00 per inspection Purchase orders 1 110 000 ÷ 185 000 = 6.00 per order Machine power 47 500 ÷ 190 000 = .25 per hour Machine setups 948 500 ÷ 9 485 = 100.00 per setup Costs per model: Zodiac Novelle Direct costs: Material a \$2 620 000 \$7 986 000 Direct labour b 196 000 462 000 Total direct costs \$2 816 000 \$ 8 448 000 Assigned costs: Soldering c \$ 220 000 \$ 660 000 Shipments d 167 200 668 800 Quality control e 315 900 854 100 Purchase orders f 632 700 477 300 Machine power g 3 800 43 700 Machine setups h 450 000 498 500 Total assigned costs \$1 789 600 \$ 3 202 400 Total cost \$4 605 600 \$11 650 400

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2 Calculations: Zodiac Novelle a Material 4 000 × \$655 22 000 × \$363 b Direct labour 4 000 × \$49 22 000 × \$21 c Soldering 400 000 × \$.55 1 200 000 × \$.55 d Shipments 3 800 × \$44 15 200 × \$44 e Quality control 21 060 × \$15 56 940 × \$15 f Purchase orders 105 450 × \$6 79 550 × \$6 g Machine power 15 200 × \$.25 174 800 × \$.25 h Machine setups 4 500 × \$100 4 985 × \$100 Profitability analysis:
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