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GGG Plc has undertaken an activity-based costing exercise and has discovered the following information: Activity Activity Cost () Annual number of Activity Cost driver activity
GGG Plc has undertaken an activity-based costing exercise and has discovered the following information: Activity Activity Cost () Annual number of Activity Cost driver activity cost drivers Operating machinery Maintaining machinery 660,000 Machine hours 110,000 Setting-up machinery Purchasing materials Controlling quality Total 1,160,350 80,000 Maintenance hour 256,000 Machinery set-up 59,850 Purchase order 104,500 Quality inspection 1,600 8,000 450 5,500 An order from a customer for 80,000 units of parts caused 14,500 hours of machining, 22 maintenance hours, 20 machinery set-ups, 35 purchase orders, and 12 quality inspections. The order used 50,000 of materials and 65,000 of direct labour. (a) Calculate the cost driver rate per activity (b) Using the activity based costing method, calculate the total overheads to be allocated to the customer order
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