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  • Problem 1: 1.1

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    Janna Mari Frias
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    This document contains examples of allocating overhead costs using activity-based costing. In problem 1, manufacturing overhead costs for materials handling and machine maintenance are allocated to LED and OLED products based on direct labor hours and material moves/machine hours. In problem 2, overhead costs are allocated to compact and hi-fi products based on their consumption of three activities, and unit costs are calculated by dividing total overhead by units produced.

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    This document contains examples of allocating overhead costs using activity-based costing. In problem 1, manufacturing overhead costs for materials handling and machine maintenance are allocated to LED and OLED products based on direct labor hours and material moves/machine hours. In problem 2, overhead costs are allocated to compact and hi-fi products based on their consumption of three activities, and unit costs are calculated by dividing total overhead by units produced.

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    42 views2 pages

    Problem 1: 1.1

    Uploaded by

    Janna Mari Frias
    This document contains examples of allocating overhead costs using activity-based costing. In problem 1, manufacturing overhead costs for materials handling and machine maintenance are allocated to LED and OLED products based on direct labor hours and material moves/machine hours. In problem 2, overhead costs are allocated to compact and hi-fi products based on their consumption of three activities, and unit costs are calculated by dividing total overhead by units produced.

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    of 2

    AFAR

    WEEK 8
    9313 - Activity Based Costing

    Problem 1:
    1.1
    Allocation based on Direct Labor Hours:
    LED 30,000
    OLED 67,500
    97,500
    LED OLED
    Direct Labor Hours: Materials Handling 23,077 51,923
    LED 1,500 X 20 = 30,000 Machine Maintenanc 55,385 124,615
    OLED 2,250 X 30 = 67,500 Total 78,462 176,538

    Materials Handling Cost:


    LED: 75,000 x 30/97.5 = 23,077
    OLED: 75,000 X 67.5/97.5 = 51,923

    Machine Maintenance Cost:


    LED: 180,000 X 30/97.5 = 55,385
    OLED: 180,000 X 67.5/97.5 = 124,615

    1.2
    Material Machine
    Moves Hours
    LED 15 10,000 LED OLED
    OLED 25 16,000 Materials Handling 28,125 46,875
    40 26000 Machine Maintenanc 69,231 110,769
    Total 97,356 157,644
    Materials Handling Cost:
    LED: 75,000 X 15/40 = 28,125
    OLED: 75,000 X 25/40 = 46,875

    Machine Maintenance Cost:


    LED: 180,000 X 10/26 = 69,231
    OLED: 180,000 X 16/26 = 110,760

    Problem 2:
    2.1 - 2.2
    Activity 1 Activity 2 Activity 3
    Compact 100 800 800
    Hi-Fi 400 200 3,000
    500 1000 3800
    Compact Hi-Fi
    Activity 1: Activity 1 4,000 16,000
    Compact: 20,000 x 1/5 = 4,000 Activity 2 29,600 7,400
    Hi-Fi: 20,000 X 4/5 = 16,000 Activity 3 19,200 72,000
    Total 52,800 95,400
    Activity 2: / 8,000 6,000
    Compact: 37,000 x 8/10 = 29,600 Unit Cost 6.6 15.9
    Hi-Fi: 37,000 x 2/10 = 7,400

    Activity 3:
    Compact: 91,200 x 800/3,800 = 19,200
    Hi-Fi: 91,200 x 3,000/3,800 = 72,000

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