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4 8. 9 TION 6 Activity Based Costing (8 Marks) 3 Best Ever Engines has two departments, Assembly and Testing. You are given the following
4 8. 9 TION 6 Activity Based Costing (8 Marks) 3 Best Ever Engines has two departments, Assembly and Testing. You are given the following information about the costs of 5 activities that occur at the manufacturing plant monthly: 5 Activity Total Costs Volume of Cost Dri 6 Material handling $ 100,000 200.000 parts 7 Supervision of direct labour $ 105,000 70 employees Janitorial and cleaning $ 150,000 3,000 hours Machining $ 240,000 6,000 machine hour 10 Total costs $ 595,000 11 12 The above activities are used by the two departments as follows: 13 Assembly Testing Material handling 150,000 parts 50,000 parts 15 Supervision of direct labour 30 employees 40 employees 16 Time spent cleaning 2,000 hours 1,000 hours Number of machine hours 4,000 machine hours 2,00 machine hour 14 7 3 Required: Using activity-based costing, determine how much of the total activity cost of $595,000 will be allocated to Assembly and how much to Testing
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