Question
Resource Module (Projected General Ledger Costs of Manufacturing Process Associated with the Two Products) Materials $2,000,000 Salaries and wages 1,000,000 Energy 500,000 License fee (environmental)
Resource Module (Projected General Ledger Costs of Manufacturing Process Associated with the Two Products)
| Materials | $2,000,000 | |
| Salaries and wages | 1,000,000 | |
| Energy | 500,000 | |
| License fee (environmental) | 200,000 | |
| Environmental fines | 400,000 | |
| Depreciation, pollution control equipment | 100,000 | |
| $4,200,000 |
Activity Module
| Resource Driver (Percentage Usage) | ||||||||||||||
| Materials | Labor | Energy | Fees | Fines | ||||||||||
| Supervising process* | 0 | % | 10 | % | 0 | % | 0 | % | 0 | % | ||||
| Setting up | 3 | 20 | 14 | 0 | 0 | |||||||||
| Blending chemicals | 80 | 40 | 30 | 0 | 0 | |||||||||
| Producing waste | 10 | 8 | 10 | 0 | 0 | |||||||||
| Disposing of hazardous waste | 6 | 12 | 15 | 40 | 70 | |||||||||
| Inspecting products | 0 | 7 | 6 | 0 | 0 | |||||||||
| Releasing air contaminants | 0 | 0 | 0 | 60 | 30 | |||||||||
| Operating pollution control equipment | 1 | 3 | 25 | 0 | 0 | |||||||||
| 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||
*Secondary activity whose costs are assigned to primary activities in proportion to the labor time used.
Cost Object Module (Products and Projected Activity Usage)
| Cost Objects | Antibiotic XK1 | Antibiotic XK5 | ||
| Expected output (pounds) | 50,000 | 50,000 | ||
| Setup hours | 12,000 | 7,000 | ||
| Direct labor hours (blending) | 24,000 | 16,000 | ||
| Pounds of waste | 8,000 | 2,000 | ||
| Pounds of hazardous waste | 5,000 | 1,000 | ||
| Hours of inspection | 3,000 | 500 | ||
| Tons of air contaminants | 4.5 | 0.5 | ||
| Machine hours (pollution control) | 2,000 | 500 | ||
List of Activity Drivers
| Activity Drivers | Activity Capacity | |
| Setup hours | 20,000 | |
| Direct labor hours (blending) | 40,000 | * |
| Pounds of waste | 10,000 | * |
| Pounds of hazardous waste | 8,000 | |
| Hours of inspection | 4,000 | |
| Tons of air contaminants | 5 | * |
| Machine hours (pollution control) | 3,000 | |
*Capacity is flexible (i.e., acquired as needed, and always matches usage).
Capacity for other activities is acquired in advance of usage.
For example, setups are acquired in units (steps) of 950 hours.
Projected usage for setups equals practical capacity.
3. Determine the cost of all activities for the proposed new process. Now, assign the cost of the secondary activity to the primary activities.
Cost of all activities:
| Activity | Cost Assigned | |
| Supervising process | $fill in the blank f755570c2faff98_1 | |
| Setting up | fill in the blank f755570c2faff98_2 | |
| Blending chemicals | fill in the blank f755570c2faff98_3 | |
| Producing waste | fill in the blank f755570c2faff98_4 | |
| Disposing of hazardous waste | fill in the blank f755570c2faff98_5 | |
| Inspecting products | fill in the blank f755570c2faff98_6 | |
| Releasing air contaminants | fill in the blank f755570c2faff98_7 | |
| Operating pollution control equipment | fill in the blank f755570c2faff98_8 | |
Primary activity costs:
| Setting up | $fill in the blank f755570c2faff98_9 | |
| Blending chemicals | fill in the blank f755570c2faff98_10 | |
| Producing waste | fill in the blank f755570c2faff98_11 | |
| Disposing of hazardous waste | fill in the blank f755570c2faff98_12 | |
| Inspecting products | fill in the blank f755570c2faff98_13 | |
| Releasing air contaminants | fill in the blank f755570c2faff98_14 | |
| Operating pollution control equipment | fill in the blank f755570c2faff98_15 |
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