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Tableco will manufacture two types of tables in the coming year-square tables and round tables. Tableco is considering introducing an activity-based costing system. Below is
Tableco will manufacture two types of tables in the coming year-square tables and round tables. Tableco is considering introducing an activity-based costing system. Below is each activity, its cost and related activity driver: Activity Cost $ Activity driver Number of Machine setups 500 000 setups Materials 96 000 Number of parts handling Cutting 48 000 Number of parts 2 100000 Direct labour Assembly hours Finishing 350 000 Number of units The level of activity estimated for the year is: Square Round Units to be produced 25 000 10 000 Number of setups 100 25 Number of parts per unit 32 16 Direct labour hours per unit 4 2 Cotal overhead cost allocated to Square tables in respect to Cutting if activity costing would be: elect one: $40000 $32000 $80000 $125000
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