ABC METHOD OF COST APPROTIONMENT IN WILKERSON COMPANY AS PER ACTUAL PR

PARTICULARS VALVES PUMPS FLOW CONTROLLERS

No. of Units 7500 12500 4000

Direct Material Cost $120,000.00 $250,000.00 $88,000.00

Direct Labour $75,000.00 $156,250.00 $40,000.00

PRIME COST (A) $195,000.00 $406,250.00 $128,000.00

Manufacturing OH
COST : MACHINE RELATED EXPS $112,500.00 $187,500.00 $36,000.00
COST DRIVER : MACHINES HRS 3750 6250 1200

COST: SETUP LABOUR $2,500.00 $12,500.00 $25,000.00

COST DRIVER: PRODUCTION RUN 10 50 100

COST: RECEIVING AND PROD $11,250.00 $56,250.00 $112,500.00

COST DRIVER: PRODUCTION RUN 10 50 100

COST: ENGINEERING SERVICES $20,000.00 $30,000.00 $50,000.00

COST DRIVER: ENGINEERING HRS 250 375 625

COST: PACKAGING AND SHIPPING $5,000.00 $35,000.00 $110,000.00

COST DRIVER: NO. OF SHIPMENTS 10 70 220

TOTAL MANUFACTURING OH $151,250.00 $321,250.00 $333,500.00

TOTAL COST ( A + B) $346,250.00 $727,500.00 $461,500.00

TOTAL SALES $645,000.00 $1,087,500.00 $420,000.00

PROFIT $298,750.00 $360,000.00 -$41,500.00

RATE OF PROFIT 46.32% 33.10% -9.88%

ABC METHOD OF COST APPROTIONMENT IN WILKERSON COMPANY AS PER ORIGINAL

PARTICULARS VALVES PUMPS FLOW CONTROLLERS
No. of Units 7500 12500 4000

Direct Material Cost $120,000.00 $250,000.00 $88,000.00

Direct Labour $75,000.00 $156,250.00 $40,000.00

PRIME COST (A) $195,000.00 $406,250.00 $128,000.00

Manufacturing OH
COST : MACHINE RELATED EXPS $105,000.00 $175,000.00 $33,600.00
COST DRIVER : MACHINES HRS 3750 6250 1200

COST: SETUP LABOUR $2,222.22 $11,111.11 $22,222.22

COST DRIVER: PRODUCTION RUN 10 50 100

COST: RECEIVING AND PROD $10,000.00 $50,000.00 $100,000.00

COST DRIVER: PRODUCTION RUN 10 50 100

COST: ENGINEERING SERVICES $20,000.00 $30,000.00 $50,000.00

COST DRIVER: ENGINEERING HRS 250 375 625

COST: PACKAGING AND SHIPPING $3,750.00 $26,250.00 $82,500.00

COST DRIVER: NO. OF SHIPMENTS 10 70 220

TOTAL MANUFACTURING OH (B) $140,972.22 $292,361.11 $288,322.22

TOTAL COST $335,972.22 $698,611.11 $416,322.22

TOTAL SALES $645,000.00 $1,087,500.00 $420,000.00

PROFIT $309,027.78 $388,888.89 $3,677.78

RATE OF PROFIT 47.91% 35.76% 0.88%

SON COMPANY AS PER ACTUAL PRODUCTIVITY
TOTAL COST DRIVER RATE

$458,000.00 Direct Materials / PER UNIT 16

$271,250.00 Direct labour /Per Unit 10

$729,250.00

Manufacturing OH $30.00
$336,000.00 $30.00
11200

$40,000.00 $250.00
160

$180,000.00 $1,125.00
160

$100,000.00 $80.00
1250

$150,000.00 $500.00
300

$806,000.00

$1,535,250.00
$2,152,500.00 ACTUAL SELLING PRICE 86

$617,250.00

28.68%

RSON COMPANY AS PER ORIGINAL CAPACITY

TOTAL IDLE CAPACITY COST DRIVER RATE

$458,000.00 Direct Materials / PER UNIT 16

$271,250.00 Direct labour /Per Unit 10

$729,250.00
 $336,000.00 $22,400.00 $28.00 This Year
11200 800 11200

$40,000.00 $4,444.44 $222.22 This Year

160 20 160

$180,000.00 $20,000.00 $1,000.00 This Year

160 20 160

$100,000.00 $0.00 $80.00 This Year

1250 0 1250

$150,000.00 $37,500.00 $375.00 This Year

300 100 300

$806,000.00

$1,535,250.00
$2,152,500.00

$617,250.00
MANAGERIAL IMPLICATION :
28.68%
Production , Packaging and Shipping , Setup Lab
the cost drivers they can work on to reduce the
Flow Controllers.
Or increase the productivity.
 20 22
12.5 10

$37.50 $30.00

87 105

20 22
12.5 10
 Last Year
12000

Last Year
180

Last Year
180

Last Year
1250

Last Year
400

CATION :

ng and Shipping , Setup Labour are

can work on to reduce the cost for

uctivity.