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