a. Compute activity rate using the ABC costing.

Activity Pools Overhead Cost

Purchasing 1,800,000

Machine Setups 800,000

Machining 3,150,000

Quality Control 720,000

b. Compute total overhead cost for each model under ABC costing
Total Overhead Cost Experio
Activity Pools Activity Rate
Purchasing 36
Machine Setups 40
Machining 78.75
Quality Control 28.8

Total Overhead Cost Vivio Curve

Activity Pools Activity Rate
Purchasing 36
Machine Setups 40
Machining 78.75
Quality Control 28.8

c. Calculate the total manufacturing cost for each model using ABC costing

Total Manufacturing Cost

EXPERIO (RM)
Direct Material RM580 x 22,000 units = 12,760,000
Direct Labour RM150 x 7,500 units = 1,125,000
Overhead Cost 2,266,850
Total Manufacturing Cost 16,151,850

d. Gross Profit
EXPERIO (RM)
Sales (RM2,000 x 22,000 units) = 44,000,000
(-)Cost:
Direct Material -12,760,000
Direct Labour -1,125,000
Overhead -2,266,850
GROSS PROFIT 27,848,150
 Activity Driver Rate

15,000 + 35,000 = 50,000 1,800,000/50,000 = RM36/orders

5,000 + 15,000 = 20,000 800,000/20,000 = RM40/setups

15,000 + 25,000 = 40,000 3,150,000/40,000 = RM78.75/machine hours

12,000 + 13,000 = 25,000 720,000/25,000 = RM 28.80/inspections

Activity Driver ABC Cost

15,000 36 x 15,000 = 540,000
5,000 40 x 5,000 = 200,000
15,000 78.75 x 15,000 = 1,181,250
12,000 28.80 x 12,000 = 345,600
Total Overhead Cost 2,266,850

Activity Driver ABC Cost

35,000 36 x 35,000 = 1,260,000
15,000 40 x 15,000 = 600,000
25,000 78.75 x 25,000 = 1,968,750
13,000 28.8 x 13,000 = 374,400
Total Overhead Cost 4,203,150

g ABC costing

VIVIO CURVE (RM)

RM670 x 16,500 = 11,055,000
RM200 x 17,500 = 3,500,000
4,203,150
18,758,150

VIVIO CURVE (RM)

(RM2,000 x 16,500 units) = 33,000,000

-11,055,000
-3,500,000
-4,203,150
14,241,850