Activity Details:

• Activity 1:
  • Cost Driver: Machine Hours (MH)
  • Cost: $600,000
  • Machine Hours Used: 60,000

• Activity 2:
  • Cost Driver: Labor Hours (LH)
  • Cost: $400,000
  • Labor Hours Used: 25,000

Requirements:

• Allocate costs to products based on activity drivers.
• Calculate the total cost for each product.
• Present the ABC cost allocation in a detailed table format.
• Discuss the benefits of using ABC in cost management.
• Analyze the impact of ABC on pricing and profitability.
• Evaluate the implementation challenges of ABC in the organization.