Costs relating to set-ups 35% Costs relating to materials handling 15% Costs relating to inspection 50% Total
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Question:
Costs relating to set-ups 35%
Costs relating to materials handling 15%
Costs relating to inspection 50%
Total production overhead 100%
The following total activity volumes are associated with each product line for the period as a whole:
| No. of set ups | No. of movements | No. of inspections |
Product D | 75 | 12 | 150 |
Product C | 115 | 21 | 180 |
Product P | 480 | 87 | 670 |
| 670 | 120 | 1000 |
Required:
(a) Identify the cost drivers for each of the cost categories above and calculate the Cost per Driver.
(b)What are the cost drivers for the following?
Production of components |
Assembly of components |
Packaging |
Shipping |
Setup costs |
Designing |
Testing |
Rent |
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