Q1: You and your boss have just attended a presentation by the consulting firm, Always Better Costing, which explained how every organisation can benefit from adopting activity-based costing. Your boss is very keen to proceed with activity-based product costing. How would you advise her?

Q2: Puresound Ltd manufactures MP3 players in its Brisbane plant. The following costs are budgeted for March.

Raw materials and components Insurance, plant Electricity, machinery Electricity, light Engineering design Depreciation, plant Depreciation, machinery Security wages, plant Equipment maintenance, wages Equipment maintenance, parts Setup wages Inspection of nished goods Property taxes Natural gas, heating $4425000 900000 180000 90000 915000 1050000 2100000 60000 225000 45000 150000 45000 180000 45000 Blusteel Ltd bill of adivilies: Blustandard Annual quantity of activity driver Activity Cost per unit of activity driver used by the product Process payables $90 per purchase order 400 purchase orders Program production $337.50 per production schedule 100 schedules Process sales order $112.50 per sales order 300 sales orders Issue materials $180 per issue 100 issues Set up solder machine $23? per setup 100 setups Solder circuit boards $22.50 per solder joint 40 000 solder joints Insert motor $45 per player 5000 players Assemble player 327 per player 5000 players Design player Directly assigned cost of 318000 for model BluStandard