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Linda is the controller for Cullumber Inc., a company that produces ice cream and specializes in dairy-free versions of the Cookie Dough and Rocky Road
Linda is the controller for Cullumber Inc., a company that produces ice cream and specializes in dairy-free versions of the Cookie Dough and Rocky Road flavors. Linda has recommended that Cullumber implement Activity-Based Costing (ABC) as they gear up to produce the following number of pints in the coming year: Cookie Dough, 96000 pints; and Rocky Road, 84000 pints. Linda believes that a traditional costing system has not been the most effective manner to allocate their Manufacturing Overhead (MOH) costs. She has compiled the following data about the usage of their company resources: Item Pounds of Ingredients Moved Cleaning/Maintenance Hours # of Inspections Supervisor Hours Cookie Dough 5300 3650 6500 2000 Rocky Road 3700 2700 3400 2400 Their MOH is comprised of the following costs: Moving and Sorting Ingredients $75000 (9000 pounds) Cleaning and Maintenance $52000 (6350 hours) Quality Control $27150 (9900 inspections) Supervisor Wages $108630 (4400 hours)
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