Page 8 - PowerPoint Presentation
P. 8
ACTIVITY BASED COSTING
Suggested Solution:
(b) Activity based costing
Machine setup-related cost per setup hour = R42 000 / 70 = R600 per
setup hour
Cost allocation:
Product A = R600 per hour x 35 hours = R21 000
Product B = R600 per hour x 35 hours = R21 000
Cost per unit:
Product A = R21 000 / 550 = R38.18 per unit
Product B = R21 000 / 110 = R190.91 per unit
8
