jola publishing june 2008 Q4 pg23

Absorption Costing
CB TJ
$ $
direct materials:
paper 0.8 0.1
ink 1.5 4.5
machine hours (w1) 2.4 4.0
cost per unit 4.7 8.6
sales price 9.3 14
margin 4.6 5.4

w1: machine hours

hours units total
CB 0.1 1000000 100000
TJ 0.17 120000 20040
120040

OAR = total overhead/activity level

23.99

ABC
cost pool $ total cost driver cost/cost driver
property costs 2160000 120040 18.0
quality control 668000 200 3340.0
production set up cost 52000 16 3250.0

CB TJ
property costs 1799400.199933 360599.800066644
quality control 601200 66800
production set up cost 13000 39000
total overhead cost 2413600.2 466399.8
units 1000000 120000
overhead cost per unit 2.4 3.9
paper 0.8 0.1
ink 1.5 4.5
cost per unit 4.7 8.5
sales price 9.3 14
margin 4.6 5.5
wargrin december 2008 pg30
A) lifecycle costing is a costing technique of calculating the total cost of a
product's lifecycle from the development stage to it's maturity stage
Wargrin should consider using lifecycle costing because stealth has a short
lifecycle of 3years

B
year 1 year 2 year 3 total
$ $ $ $
selling price 240000 480000 120000 840000
marketing 60000 40000 100000
design and developmen 0 0
total costs 130000 225000 130000 485000
255000

net profit 30.4

yam co june 2009 pg34

A B C
$ $ $
sellipng price 70 60 27
direct material 3 2.5 1.8
throughput per unit 67 57.5 25.2
bottleneck 0.5 0.5 0.4
throughput return per 134 115 63
total factory cost per 90 90 90
TPAR 1.49 1.28 0.70

w1: cost per factory hr

factory cost 18000000
labour 2250000
20250000
factory hours 225000
90

BBB pg50 june 2010

GC EX
$ $
direct material 3500 8000
labour 4500 7500
overhead 3000 5000
cost 11000 20500
quoted price 16500 30750

w1: OAR
total overhead/total activity level 10
HRS unit total
GC 300 50 15000
EX 500 50 25000
40000

ABC
item cost pool total cost driver cost/driver
supervisors 90000 500 180
planners 70000 250 280
property related 240000 40000 6

GC EX
supervisors 180 1080
planners 280 1400
property related 1800 3000
overhead 2260 5480

GC EX
$ $
direct material 3500 8000
labour 4500 7500
overhead 2260 5480
cost 10260 20980
quoted price 15390 31470

cut and stitch june 2010 pg 52

7w + 5l = 3500 * 2
2w + 2l = 1200 * 7

14w + 10l = 7000

14w + 14l = 9600

4l = 2600
l = 650
7w + 5(650) = 3500
7w + 3250 = 3500
7w = 250
w = 35.7

c = 48w + 40l
c = 48(35.7) + 40(650)
c = 27,713.6

december 2010 gadget co pg 63

absorption costing
A B C
selling price 7.5 12 13
raw material 2.4 3.6 4.8
direct labour 1.48 2.22 2.96
machine hours w1 14 20 25
18 26 33

w1: OAR
hrs units total
A 0.1 15000 1500
B 0.15 12000 1800
C 0.2 18000 3600
6900

total cost 195270

oar 28.3

ABC
cost pool amount cost driver cost/driver
set up 26550 36 737.5
running costs 66400 6900 9.6
procurement 48000 94 510.6
deliveries 54320 140 388.0

A B C
set up 11800 8850 5900
running costs 14434.8 17321.7 34643.5
procurement 12255.3 14297.9 21446.8
deliveries 18624 11640 24056
57114.1 52109.6 86046.3
cost per unit 3.81 4.34 4.78
raw material 2.4 3.6 4.8
direct labour 1.48 2.22 2.96
7.69 10.16 12.54

june 2011 thin co pg 70