Capacity Cost Rates for Resources:

Employed days/month

Production workers 20
Indirect workers 20
Engineers 20
Machines 20

Monthly Resource Cost and Utilization:

Units
Direct labor 90
Machines 62
Setup 30
Receiving & production control 4
Engineers 8
Packing & shipping 28

*Hour used:

Valves
Production Volume 7,500
DL Hrs per unit 0.38
Total DL Hrs. 2,850
Machinw hrs/unit 0.5
Total Production Machine runs
3,750
(Hrs.)
Set up Hrs.(Labour & Machine) 100
Total machines Hrs. 3,850
Production Runs 20
PR1(PR*Component) 100
Reveicing & Production control 125
Engineers 60
Packaging & shipping Hrs 1,033
 Overhead Manufacturing overhead
Machine-related expenses $ 334,800.00
Set-up labor $ 117,000.00
Receiving and Production Control $ 15,600.00
Engineering $ 78,000.00
Packaging and shipping $ 109,200.00
TOTAL $654,600.00

Valves
Overhead Hours or Runs
Machine-related expenses(Hrs) 3850
Set-up labor(Hrs) 100
Receiving and Production Control(Runs) 100
Engineering(Hrs) 60
Packaging and shipping(Shipments) 40
TOTAL
Cost / Unit

Overhead Valves
Manufacturing $ 110,321.91
Direct Material Costs $ 120,000.00
Direct Labour Costs $ 92,625.00
Total Costs $ 322,946.91
Total Costs/unit $ 43.06

Valves
Cost for traditional method 51.20
Cost for ABC method 43.06
Selling Price 79.00
Gross Margin (Traditional) 35%
Gross Margin (ABC) 45.49%
Differences of gross margin 10%
 Productive hours Hours per
Monthly cost ($) Paid hours per day
per day month
3,900 7.5 6 120
3,900 7.5 6.5 130
9,750 7.5 6 120
5,400 12 240

Monthly cost
Total cost ($) Hour available *Hours used
($) /unit
3,900 351,000 10800 10,700
5,400 334,800 14880 14,600
3,900 117,000 3600 3,400
3,900 15,600 480 3562.5
9,750 78,000 960 900
3,900 109,200 3640 3,483

Pumps Controllers Hours used

12,500 4,000 24,000
0.5 0.4
6,250 1,600 10,700
0.5 0.3

6,250 1,200 11,200

600 2,700 3,400
6,850 3,900 14,600
100 225 345
500 2250 2,850
625 2812.5 3562.5
240 600 900
1,750 700 3,483
 Total Cost Driver Total Cost Driver Rate of Cost Driver
14,600 Hours $ 22.93
3,400 Hours $ 34.41
Prodcution Runs* no.of
2850 $ 5.47
components
900 Hours $ 86.67
340 No. of Shipments $ 321.18
16185

Valves Pumps Flow Controllers

Total Costs Hours Total Costs Hours
$ 88,286.30 6850 $ 157,080.82 3900
$ 3,441.18 600 $ 20,647.06 2700
$ 547.37 500 $ 2,736.84 2250
$ 5,200.00 240 $ 20,800.00 600
$ 12,847.06 100 $ 32,117.65 200
$ 110,321.91 $ 233,382.37

Pumps Flow Controllers Items

$ 233,382.37 $ 310,895.73 Valves
$ 250,000.00 $ 88,000.00 Pump
$ 203,125.00 $ 52,000.00 Flow controller
$ 686,507.37 $ 450,895.73
$ 54.92 $ 112.72

Pumps Flow Controllers

$ 66.31 $ 59.05
54.92 112.72
70.00 95.00
5% 38%
21.54% -18.66%
17% -57%
Cost per hour ($)

32.5
30
81.25
22.5

Capacity used (%)

99.0740740740741
98.1182795698925
94.4444444444444
742.1875
93.75
95.6868131868132
Flow Controllers
Total Costs
$ 89,432.88
$ 92,911.76
$ 12,315.79
$ 52,000.00
$ 64,235.29
$ 310,895.73

DLC PER HR 32.5

Units DMC/UNIT DLS/UNIT

7500 16 12.35
12500 20 16.25
4000 22 13
 Valves
Total T PU
Sales 1847500 592500
DLC 351000 93490.65
DME 458000 153348.2
CM 1038500 345661.1
MO
Machine-related expenses 334800 13987.18
Set-up labor 117000
Receiving and Production Control 15600
Engineering 78000
Packaging and shipping 109200
 pumps FC
T PU T PU
875000 380000 1847500 1.864957
205023.4 52485.98 351000
255580.4 49071.43 458000
414396.3 278442.6 1038500

23311.97 7459.829
Capacity Cost Rates for Resources:

Employed days/month

Production workers 20
Indirect workers 20
Engineers 20
Machines 20

Monthly Resource Cost and Utilization:

Units
Direct labor 90
Machines 62
Setup 30
Receiving & production control 4
Engineers 8
Packing & shipping 28

*Hour used:

Valves
Production Volume 10,000
DL Hrs per unit 0.38
Total DL Hrs. 3,800
Machinw hrs/unit 0.5
Total Production Machine runs
5,000
(Hrs.)
Set up Hrs.(Labour & Machine) 160
Total machines Hrs. 5,160
Production Runs 40
PR1(PR*Component) 200
Reveicing & Production control 250
Engineers 60
No.of Shipments 40
 Packaging & shipping Hrs 1,367

Overhead Manufacturing overhead

Machine-related expenses $ 334,800.00
Set-up labor $ 117,000.00
Receiving and Production Control $ 15,600.00
Engineering $ 78,000.00
Packaging and shipping $ 109,200.00
TOTAL $654,600.00

Valves
Overhead Hours or Runs
Machine-related expenses(Hrs) 5,160
Set-up labor(Hrs) 160
Receiving and Production Control(Runs) 200
Engineering(Hrs) 60
Packaging and shipping(Shipments) 40
TOTAL
Cost / Unit

Overhead Valves
Manufacturing $ 190,757.10
Direct Material Costs $ 160,000.00
Direct Labour Costs $ 123,500.00
Total Costs $ 474,257.10
Total Costs/unit $ 47.43

Valves
Cost for traditional method 51.20
Cost for ABC method 47.43
Selling Price 75.00
Gross Margin (Traditional) 35%
Gross Margin (ABC) 36.77%
Differences of gross margin 2%

Sales 1985000
DMC 455000
DLC 351000
CM 1179000
CM% 59.40%
MO
Machine-related expenses 334800.00
Set-up labor 117000.00
Receiving and Production Control 15600.00
Engineering 78000.00
Packaging and shipping 109200.00
Total Overhead costs 654600.00
Total Cost 1460600.00
Gross Margin 26.42
 Productive hours Hours per
Monthly cost ($) Paid hours per day
per day month
3,900 7.5 6 120
3,900 7.5 6.5 130
9,750 7.5 6 120
5,400 12 240

162.5

Monthly cost
Total cost ($) Hour available *Hours used
($) /unit
3,900 351,000 10800 10,800
5,400 334,800 14880 12,582
3,900 117,000 3600 832
3,900 15,600 480 1125
9,750 78,000 960 700
3,900 109,200 3640 3,442

Pumps Controllers Hours used

12,000 2,500 24,000
0.5 0.4
6,000 1,000 10,800
0.5 0.3

6,000 750 11,750

192 480 832
6,192 1,230 12,582
40 50 130
200 500 900
250 625 1125
240 400 700
70 100 210
 1,658 416.666666666667 3,442

Total Cost Driver Total Cost Driver Rate of Cost Driver

12,582 Hours $ 26.61
832 Hours $ 140.63
Prodcution Runs* no.of
900 $ 17.33
components
700 Hours $ 111.43
210 No. of Shipments $ 520.00
16185

Valves Pumps Flow Controllers

Total Costs Hours Total Costs Hours
$ 137,304.72 6,192 $ 164,765.67 1,230
$ 22,500.00 192 $ 27,000.00 480
$ 3,466.67 200 $ 3,466.67 500
$ 6,685.71 240 $ 26,742.86 400
$ 20,800.00 70 $ 36,400.00 100
$ 190,757.10 $ 258,375.19

Pumps Flow Controllers Items

$ 258,375.19 $ 205,467.71 Valves
$ 240,000.00 $ 55,000.00 Pump
$ 195,000.00 $ 32,500.00 Flow controller
$ 693,375.19 $ 292,967.71
$ 57.78 $ 117.19

Pumps Flow Controllers

66.31 59.05
57.78 117.19
80.00 110.00
5% 38%
27.77% -6.53%
23% -45%

Valves Pumps FC
750000 960000 275000
160000 240000 55000
 123500 195000 32500
466500 525000 187500
62.20% 54.69% 68.18%

137304.72 164765.67 32729.61

22500.00 27000.00 67500.00
3466.67 3466.67 8666.67
6685.71 26742.86 44571.43
20800.00 36400.00 52000.00
190757.10 258375.19 205467.71
474257.10 693375.19 292967.71
36.77 27.77 -6.53
Cost per hour ($)

32.5
30
81.25
22.5

Capacity used (%)

100
84.5564516129032
23.1111111111111
234.375
72.9166666666667
94.551282051282
Flow Controllers
Total Costs
$ 32,729.61
$ 67,500.00
$ 8,666.67
$ 44,571.43
$ 52,000.00
$ 205,467.71

DLC PER HR 32.5

Units DMC/UNIT DLS/UNIT

10,000 16 12.35
12,000 20 16.25
2,500 22 13