=+6-43 KKK Plant-wide, department and activity cost rates OBJECTIVES 5, 7, 10 Ultimate Medals makes trophies, plaques and medallions, and operates at capacity. Ultimate Medals does large custom orders, for example the participant trophies for the Geelong Super Strikers. The management accountant has asked you to compare plant-wide, department and activity-based cost allocation.

Ultimate Medals Budgeted information per unit for the year ended 30 November 2013 Forming Department Trophies Plaques Medallions Direct materials $2.50 $1.50 $0.50 Direct labour 3.00 1.20 0.60

$5.50 $2.70 $1.10 Assembly Department Trophies Plaques Medallions Direct materials $0.50 $1.25 $0.25 Direct labour 1.50 1.50 0.50

$2.00 $2.75 $0.75 Packaging Department Trophies Plaques Medallions Direct materials $0.75 $0.50 $0.10 Direct labour 0.75 0.25 0.10

$1.50 $0.75 $0.20 Number of units produced 5 200 7 500 16 700 Chapter 6: Activity-based costing and activity-based management 253 M06_HORN3377_02_LT_C06.indd 253 2/09/13 3:26 PM The overhead cost for each department is:

Forming Department Materials handling $5 700 Quality inspection 6 300 Utilities 10 386

$22 386 Assembly Department Materials handling $9 200 Quality inspection 13 800 Utilities 10 960

$33 960 Packaging Department Materials handling $18 315 Quality inspection 14 985 Utilities 8 934

$42 234 Other information:

Materials-handling and quality-inspection costs vary with the number of batches processed in each department. The number of batches for each product line in each department is as follows:

Trophies Plaques Medallions Forming Department 116 40 44 Assembly Department 63 83 84 Packaging Department 80 100 190 Utilities costs vary with direct labour costs in each department.

Required 1 Calculate the cost per unit of trophies, plaques and medallions based on a single plant-wide overhead rate, if total overhead is allocated based on total direct costs.