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The company has implemented an activity-based costing system for its manufacturing overhead costs with the activity cost pools and activity driver data below. Activity Activity
The company has implemented an activity-based costing system for its manufacturing overhead costs with the activity cost pools and activity driver data below.
Activity | Activity Cost ($) | Total | Activity Drivers | |
Basic system | Advanced system | |||
Machine set up | 100 000 | 200 setup | 50 setup | 150 setup |
Material receiving | 60 000 | 80 000 kilograms | 30 000 kilograms | 50 000 kilograms |
Inspection | 80 000 | 1600 inspections | 700 inspections | 900 inspections |
Engineering | 140 000 | 7 000 EH | 3 000 EH | 4 000 EH |
Total Overhead | 800 000 | |||
MH = Machine hours | ||||
EH = Engineering hours | ||||
Southern Cross plans to produce 1 000 units of each model of fax machine
Question:
- Determine, under activity-based costing, the total overhead to be assigned to each product line.
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