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Unit
 
Cost
 
Under
 
ABC
 
Costing
 
MethodBright
 
and
 
Shiny
 
Dog
 
CollarsActivity
 
Cost
 
Pools Cost
 
DriversEstimated
 
OverheadExpected
 
Use
 
of 
 
Cost
 
DriversExpected
 
Use
 
of 
 
Cost
 
Drivers
 
per
 
ProductSimple JeweledPurchasing Orders 3,000 10 3 7Receiving Yards 500 20 6 12Cutting Yards 1,800 500 225 275Assembling Pieces 2,400 500 225 275Finishing Pieces 1,500 500 225 275Packing
 
and
 
shipping Cartons 800 50 15 35$10,000Step
 
1 Activity
 
Cost
 
PoolsEstimated
 
OverheadExpected
 
Use
 
of 
 
Cost
 
DriversCost
 
per
 
unit
 
Purchasing 3,000 / 10 = 300.00Receiving 500 / 20 = 25.00Cutting 1,800 / 500 = 3.60Assembling 2,400 / 500 = 4.80Finishing 1,500 / 500 = 3.00Packing
 
and
 
shipping 800 / 50 = 16.00$10,000Calculation
 
for
 
Simple
 
CollarStep
 
2a Activity
 
Cost
 
PoolsCost
 
per
 
unit
 
SimpleCost
 
per
 
UnitPurchasing 300.00 X 3 = 900.00Receiving 25.00 X 6 = 150.00Cutting 3.60 X 225 = 810.00Assembling 4.80 X 225 = 1,080.00Finishing 3.00 X 225 = 675.00Packing
 
and
 
shipping 16.00 X 15 = 240.00$3,855.00 Total
 
Overhead/ 225Units
 
Produced$17.13 Overhead
 
Cost
 
Per
 
Unit
 
Calculation
 
for
 
Jeweled
 
CollarStep
 
2b Activity
 
Cost
 
PoolsCost
 
per
 
unit
 
JeweledCost
 
per
 
UnitPurchasing 300.00 X 7 = 3,600.00Receiving 25.00 X 12 = 6,875.00Cutting 3.60 X 275 = 990.00Assembling 4.80 X 275 = 1,320.00Finishing 3.00 X 275 = 105.00Packing
 
and
 
shipping 16.00 X 35 = 560.00$13,450.00 Total
 
Overhead/ 275 Units
 
Produced$48.91 Overhead
 
Cost
 
Per
 
UnitUnit
 
Product
 
Cost
 
Under
 
ABC
 
Costing
 
MethodSimple JeweledDirect
 
Material 0.50
 
10.00
 
Direct
 
Labor 3.50
 
7.00
 
Overhead 17.13
 
48.91
 
Total
 
Unit
 
Cost 21.13$
 
65.91$
 
of 00

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