Acacia Patins Ltd manufacturers paint and uses an activity-based product costing system. The table overleaf lists the labour and overhead costs of the Mixing Centre for the current year, and their resource drivers.

Required:
1. Complete the following table to calculate the cost of the activity 'Load mixer' for the current year. This activity is performed in the Mixing Centre
Acacia Paints Ltd Activity Load Mixer

2. Why would Acacia Paints use an activity - based product costing system that assigns labour as well as overhead costs to activities?
3. How would the management accountant obtain details of the activities performed and the quantity of resource drivers used by the activities in the Mixing Centre?

Transcribed Image Text:

Acacia Paints Ltd Mixing Centre Costs and Resource Drivers Amount of resource driver consumed by the centre Resource driver Total cost Head count Kilowatt hours Machine hours Head count 5 people 10 000 kilowatt hours 5 000 machine hours $200 000 Wages 160 000 40 000 20 000 Energy Depreciation Other Total labour and overhead costs 5 people $420 000 Cost category Mixing Amount of resource driver Cost of activity Centre cost used to load mixer "Load mixer' Wages $200 000 5% of total labour time in Mixing Centre Energy 160 000 500 Kilowatt hours Depreciation 40 000 100 machine hours ? Other 20 000 5% of total labour time in Maxing Centre Total $420 000