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Your company manufactures 3 products - Basic, Advanced and Amazing. They all share a production engineering department. That department costs $1,000,000 per year to operated.
Your company manufactures 3 products - Basic, Advanced and Amazing. They all share a production engineering department. That department costs $1,000,000 per year to operated. Here is some information on the products and engineering:
Product | Sales | Engineering hours spent on the production lines |
Basic | 600,000 | 4,000 |
Advanced | 300,000 | 3,000 |
Amazing | 100,000 | 3,000 |
Using ABC, how much costs would you allocate to the Amazing Product for engineering overhead?
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