Activity Band

Costing
Technique for the allocation
- of
-
OH
by
most selevant
finding
out activities

have
eject selationship
which a came and
of Cost
finding appropriate
with and

Codrivesfitto
such activitia to
o

Service
Products Customes

Traditional UIs AC
system
↳ Traditional
System allocate

·
OH to departments.
bans
finding for Calculating OtR
·

produs
ol to
Allocating
·

Overhead

Department
OAR OAR OAR oFK.
↳
Activity Based
System
find activities
having relationship with OH.
·

lost drives
find you
all activition
·

·find of
you toevery activity
· Allocate of
product/service
Overhead.

Activities

& AR
OAR OAR OUR

small illet sation on ArsC

- .

. . . asof: I.T
- -
~ -

- v

-. -

- -
-
-
 1 I I I Total
. . .

I Setup Cost 85,600 32,100 107,000 428,000 652,700

0 A Cost
. 188,000 70,500 188,000 (12,800 559,300
Mat
Pooc -x
86480 81.075 54,053 100, 100 5705
360,000 -
183,675 349058
S
648.900
0 Hut 3 6.080 24.49 69.81 81.17

Dodoiness. A
10,000
*
7,500
1I

5,000 8,000
Ital

240
batch 25 500 100 40
size.
L

batchan 48 15 50 200
⑱
14000 I
47
&
vit tasted
4,000 2400 11900
1500 1

lod)
0 Requisition 80 75 50 100 305
 ju
-w L
v

·old

- U

- - -

- U

v
-

V
-.
-
9,240 w
- -

7200
T

Traditional Allocation basis.

Total Folt= R: 52,000

Machine Gos: 2600x
OAR/hour: R: 20

#B I #

his Int 43 2 3

no too to a
rin=
wit

Machie 2,600 Machine

his total Rsc

Cost Int A * & I

. .

DM 80 100 60 120

BL Yo 525 55

u
Es
Off

clun't 200
Cost (unit ABC
using
A B 2 I Total
-

Setup Colt 3,000 2500

I
2,000 3,000
1800
10.500
&
tose Reco 1800 1800 1800 7,200
1200
L

Inspection 1200 1,000 600 4,200

(

Mat handly 2,640 2,200 1760 2640 9240

-

Mac Related 4 5777 20.860

#For
16342 12 314 SE-14,
&
417
200
-

Wit 240 160 240

OH (cit 68.89 61.5755860-07

Balis-wos
kin
A 1 I
batche 240/20 200120 160120 2401 20

12 100 42
- .
⑧
-
12

1500. 250

4200
-
= 100
42

Osdes 240/10 200/ 10 16010 240110

be ⑭
ofto
2

# B c #
Mach Roc 24ox4 200x3 160x2 2Yox3

ga
960
Cost Int
bord
(a)
activity # B I R
Do 80 100 60 120
DL 40 50 2555
OH 68.09 81.57 55.8 60.07
188.09 211.57 10.8 23507
C

Cost Int A * a
& I
-M 80 100 60
-
120 L

BL Yo 50 25 55

28 E
Off

clun't
-

s
 .... -

w
v 125=
->

3430
&

- v 245,000=
-

I
250 735
I
->
=
=
750:
490

v v v W v

-
v N U w

- - w -
w

- - -

v
-

Traditional allocation
system
Factosy 0H= 1,400,000 = R: Ollabors
Rows
175000
C

x I
Unit 10,000 2,000 50,000

Lashes, it 2.5 5.8 2.8

25,000 10,000 170,000 =

175,000 -

Folt (unit & I 3

16)- 2.5 5.0 2.8

OARIH O O 8
OARInt 20 40 22.4
 Allocation of ABC
of using
(a) Allocation Cost
of
Activitia (Cost x
- I 3 Total

Stay-Colt 274,400 137,200 17,158 428,757

Pood. Control 75,000 20,000 150,000 245,000
QC. Cost 73,58 36,758 73,500 183,758
Mat 196,000 14,700 3 67,500
Managent 156,800
Others 25,000 10,000 190,000 175,000
- -

604.For 399.958 395,358

(b)
Boallocation
x Y 3 To feel
-

uniti -10,000 2,000 50,000

batch. Size 125 50 10,000
batche du 48 j 125

Machine has kit 7.5 10 3

Total Hoc 75,000 20,000 150,000 245000

500 108 1000

Fast ont
Insp.hoskit 0.2 0.5 0.1

Imp.hous 100 50 100 250

Requisition. 328 400 30 750

Perot Fot-ABC
1 & I
Total allocated of
604,700 399,958 395,350
Unite 10,000 2,000 50,000
OAR ( wit 60.47 199.98 7.93

Traditional OARI it 20.00 40.00 22.40

 - -
C

Labous hous
&
-
--
2 1.5 2.5
-

-
6 7 5
r uu
v

v
- . . .

-w
w c 2 -

0s dess -25, 100

setp. 360:10
-

In. hs =
6200

9,850 = 705000 -

0.014

Allocation Est
of
(000)
A E 3 Total
- .

Procurement Cost 1,000 500 1,000 2500

~

Batch 1,000 1600 1,000 3,600

Setup Cost
I

Colt 1455 1746 1309 4510

Insp. 7

9.870
& &

Others. 4,200 3 920 1,75

OHs 7655 7.765 5059
C

OH(nt 153.15 194.15 202.37

Allocation Bali.

d Y y Total
. . .

Production unt 50,000 40,000 25,000

Material (unit 2
Kg 1.5Kg 2.5kg.
Total
kg. -100,000kg 60,000 625001.
kg.
EOQ.
10,000kg 12,000 6250kg
kg ↑

100sdesc
#of osces. 100scles 25
50sdes1

Batch 250ct
Size 500 bit 2500nt

batcher 100 160 100 360

 28 18
Imp.hous. I batd 15

batche 100 160 100

Ensp.bous Total 2,000 200 1800 6200

-

Labour hour lit 6.0 7.0 5.0

Total (a). hous 300,000 280,000 125000 705000

Cost (it-AB.C
x I z
Material 400 300 500
Labous 300 35 250

OH allocate 153.18 194.15 202. 37

Clun't 853.10 844.15 957.37

D
#

Don

7
-
X

DL X
. . . w

- -

-UpoH

I
-

-
morp.

Sp
·
FPOH
- . -Admin)Solf
plogit
·

-O
-

-
18,000,000
-a 72000
~

lost
many &

Cost
may.
W ->
A 250
->
NMOH
->
HMOHf
-T
-
- . . .

NMOH-

. . v -

...
-

T
-

-
-

--
Solution of allocation
KSL osdes
pricing
Ba 3 000,000

Indisact Labous. 7,200,000 B (as

16,000 x 252) 1,500,000
Other M. OH 9,000,000
VOH (6000 x 225 1,350,000
16,200,000
Labour hous 5.850,000
72,000
2925000
225- Maskup 50Y & &

8.775,000
-

Activity based Costing

Acf 1 Act 2 c+3
* Acta Total

Ind. (as. 4,320,000, 50,000 1440,000

-
7,200,000
0.550,000 450,000 9,000,000
Many.OHother
~
-v

QC 900,000 600,000 -
-

1.500,000
To 126000 882,000
-

252,000 1260,000
1350,00
&

Admin. - -
600,000 750,000
-

13,096,000 600,000 2,829,000

Bani 72,000
29230020 40,000,000

O AR 1931hs
24350dy 30,000 losd. 0.0723/
Roymat
KSL-pricing
Old Sp 8,775,000
Material. 3,000,000
Labous 1,500,000 New Sp 7.685,500
OH AC1 1150,000 (6000 x 193) 1009500
OH Act 2 243,500 (24,350x10)
* H AC 3. 30,000
0 H Act 4 216,900 (3,000,000x0.0723)
6148,700 = d0x

Magin 1.537,100
Selliypsice 7.685,500
 I

- . - -

- .

O => :Th
* OFFOMachi s.
22
- C
v . . .

- -

- - -
-

. . .

OtheColl
.

v U-

End-Mat 3 67,000
v -

- End. Cal 270,000

.. Elect 200,000
0 (t
-
151,000
954000

~
↑
600,000 x 60x =
30,000
Xu -

. .

Allocation Colt
of

60,000 ,000
I

Setup Cost
cost 5 or 60,000
I
nsp. 60,000 100,000 72,000 72,000

Purddep.(lt 45000 27000 L

36,000 3 6,000
End. Las-Sup. 100, 645 & 1.290 38.710 139,3530
Other sit 231273 289,091 173,755 260, 162
> 60, 164
486,918 583 =
567,537
-
= -

Posit 243.46 376.92 360.16 315.3

 ↑

Banis
of
allocation

to
I

Unit to 1500 1800

&

Batch size. 80 50 50 60

butthe 25 30 20 300 105

Inspect hs. I batch. 20 30 30 20

Total sc 500 900 600 600 2600

Osces 10 6 D 8 32

Lashes (it 13 10
20
14
Total Las hs 26,000 21000 10,000 36,000 93,000

Mode hos It 0.4 0.667 0.6 0.5

Total Msh.Gs 800 + 1,000 + 600+ 900 = 3300
&

total OH 1980,000
Madi hs- 3.300
210,000 + 105: 2,000
600/ks
-12000:2600: This 20 t00 -60
2

360,000 93000
+
.. 3.8709 Posit 300

954000 = 330028908
240/600 40010. 36%00 300/600
0.4 0.667 0.6 0.5

Comparison
& Y I
Psuit OH-Toad o 400 360 300

Yes it PH-ADC 243046 376.92 7 60.16 315. 30

- =
#

0 Hs
. . .
=OAR.
Labor

- .
:100/hour
R
-
1-
-

2v X

=E
-

-> N. M.C. -

-
<
--

MO

ps.

v -
w
I
w ~
2
-
-

↳-
⑤ -
6 -
 OC
Machop. Main Tech Pros Dispatch
Cost 2,500,000 1500,000 2,000,000 1,000,000 1,600,000
Pallof I.S. 600,000 1,000,000 (2,000,000) 240,000 160,000

Reall 100,000)
E5toor ago
1750,000

sooo interest
of
M.
C
&

4850,000
J
- -

Bah's 50,000
12 150

Mch. No, Osdesi sal. Old batche

16458332733.33/
r
0 AR. 97(Hous 22,750lood.
I
Isakosd. Datel
overhead 8,600,000
-
1286.667/hous
Laso.Hos 30,000

(old)
Final Lu MU

D. Mat 850,000 900,000

D. Labour 100,000 150,000
(1000 x100) (1500 x 100)

Overhead. 286,667 430,000(1500x286.667)

(1000x286.667)
1,236,667 1480,000

#(New)

of
MU

DM ,000 900,000
Blasous 100,000 150,000
Over head

Pood. Related 485,000 349.200

Procurement 113,758 136,500
D)
is 131.667 1 64.583
patch.
OC 68.333 65,600

1748,750 1765083
batctn LU oU

production 10,000 12,000

batch YOU 500
size.
batches 25 24
Machine ls/batch. *
200 *150
Mach. His total. 5000 3,600

Purchase Osdes:
LU MU
-

Material &50,000 900,000

to
=

FOD. 170,000

5 codes