ABC

A company decide to experiment by applying the principles of ABC to the four product
currently made and sold by the company. Details of the four products and relevant information
are given below for one period:
Product A B C D
Output in units 120 100 80 120
Costs per unit:
Direct material 40 50 30 60
Direct labour 28 21 14 21
Machine hours (per unit) 4 3 2 3
The four products are similar and are usually produced in production runs of 20 units and sold
in batches of 10 units.
The production overhead is currently absorbed by using machine hour rate, and the total of the
production overhead for the period has been analysed as follows:
$
Machine department costs (rent, business rates, depreciation and supervision) 10,430
Set-up costs 5,250
Stores receiving 3,600
Inspection / Quality control 2,100
Materials handling and despatch 4,620
The company ascertained that the ‘cost drivers’ to be used are as listed below for the
overhead costs shown:

Cost Cost Driver
Set up costs Number of production runs
Stores receiving Requisitions raise
Inspection / Quality control Number of production runs
Materials handling and despatch Order executed

The number of requisitions raised on the stores was 20 for each product and the number of
orders executed was 42, each order being for a batch of 10 of a product.

Required: Calculate the total costs for each product, using activity-based costing.

The Ans is : A – 16,331.08; B – 13,256.92; C – 7,983.69; D – 16,928.31

Below is my calculation ,can i know which step i miss up to calculate? because i cant get the ans for all product.

Set up&inspection
OH cost=5250+2100=7350
Total cost driver=(120/20)+(100/20)+(80/20)+(120/20)=21
7350/21=350

A =350×6=2100
B= 350X5=1750
C =350X4=1400
D =350X6=2100

stores receiving
OH cost=3600
Total cost driver=20+20+20+20=80
3600/80=45

A= 45×20=900
B=45×20=900
C=45×20=900
D=45×20=900

Material handling
OH cost=4620
Total cost driver=(120/10)+(100/10)+(80/10)+(120/10)=42
4620/42=110

A= 110×12=1320
B=110×10=1100
C=110×8=880
D=110×12=1320

Total cost
A=2100+900+1320=4320
B=1750+900+1100=3750
C=1400+900+880=3180
D=2100+900+1320=4320