Classic Pen

Topics: Costs, Computer, Machine Pages: 3 (456 words) Published: October 25, 2012
Question 1:
Calculate the revised product cost for the four pens, based on the activity information collected by Dempsey:

ActivitiesIndirect labour Computer system
Scheduling / production runs50%80%
Physical changeover40%
Record maintenance10%20%

Activity cost poolActivity measures
Scheduling / production runsNo of runs
Physical changeoverNo of hours
Record maintenanceNo of hours

Scheduling / production runsPhysical changeoverRecord maintenanceMachine capacityTotal

Indirect labour50%40%10%100%
Computer system80%020%100%
Fringe benefits50%40%10%100%
Machinery0%0%0%100%0%
Maintenance0%0%0%100%0%
Energy0%0%0%100%0%

Scheduling / production runsPhysical changeoverRecord maintenanceMachine capacityTotal cost Indirect labour 10,000 8,000 2,000 - 20,000
Computer system 8,000 - 2,000 - 10,000
Fringe benefits 4,000 3,200 800 - 8,000
Machinery - - - 8,000 8,000
Maintenance - - - 4,000 4,000
Energy - - - 2,000 2,000
Total cost 22,000 11,200 4,800 14,000 52,000

Total activity150526410000

Activity rate 146.67 21.29 1,200.00 1.40

PRODUCT COST WORKINGS
BlueBlackRedPurpleTotal

Production units 50,000 40,000 9,000 1,000 100,000

Production run hours 50 50 38 12 150

Set up time 200 50 228 48 526

Parts admin 1 1 1 1 4

Machine hours 5,000 4,000 900 100 10,000

Revised product cost

Sales7500060000139501650150600

Materials 25,000 20,000 4,680 550 50,230

Direct labour 10,000 8,000 1,800 200 20,000...
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