Puresound Ltd manufactures MP3 players in its Brishbane plant. The following costs are budgeted for March.
_____________________________________________________ $4, 425 000
Raw materials and components ........................................... 900 000
Insurance, plant ............................................................. 180 000
Electricity, machinery ....................................................... 90 000
Electricity, light ............................................................. 915 000
Engineering design ...................................................... 1 050 000
Depreciation, plant ....................................................... 2 100 000
Depreciation, machinery ................................................... 60 000
Security wages, plant ...................................................... 225 000
Equipment maintenance, wages .......................................... 45 000
Setup wages ................................................................. 60 000
Inspection of finished goods ............................................. 45 000
Property taxes ............................................................. 180 000
Natural gas, heating ........................................................ 45 000
Required:
1. Assign the costs to the materials-related, machinery-related, set up, inspection, engineering and facility-sustaining activities and calculate the total cost of each activity.
2. Identify an activity driver suitable for assigning each activity's costs to products?