- This topic has 1 reply, 2 voices, and was last updated 6 years ago by
.
- Posts
ABC
Alpha Beta
Number of units 120,000 40,000
Direct materials per unit 100 40
Direct labour hours per unit 4 2
Machine hours per unit 2 6
Direct labour cost per hour is $6 per hour
Number of production runs 8 40
Number of deliveries 20 120Overhead costs:
Set up $ 48,000
Machines $1,200,000
Packing $420,000
Engineering $748,000Calculate the contribution and profit using an ABC approach to allocate overhead
The cost drivers for Set up is production runs, machines is machine hours, packing is deliveries so what will be the cost driver for engineering overhead?
Tq
There is not enough information for me to be able to say what cost driver to use.
If it is a question from the current edition of the BPP Revision Kit, or if it is a past exam question, then tell me which one so that I can check the question.
(You presumably have an answer in the same book in which you found the question – what does the answer use as a cost driver?)
- You must be logged in to reply to this topic.