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ILLUSTRATION 5.2 ABC Ltd. Has collected the following data for its two activities. It calculates cost rates based on cost driver capacity. Activity Cost Driver
ILLUSTRATION 5.2 ABC Ltd. Has collected the following data for its two activities. It calculates cost rates based on cost driver capacity. Activity Cost Driver Capacity Cost Power Kilowatt hours 60,000 kWhr. $3,00,000 Inspection No. of Inspections 25,000 Inspection $5,00,000 The company makes three products A, B and C. For the year ended 31st March, 2019, the following consumption of cost drivers was reported. Product Kilowatt hours Quality Inspection A 10,000 10,000 B 25,000 8,000 C 20,000 5,000 Required: (i) (ii) Compute the cost allocated to each product from each activity. Calculate the cost of unused capacity for each activity
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