COMM 305 Chapter Notes - Chapter 5: Billable Hours, Cost Driver, Quality Control
24 Jan 2015
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. 50 (d) the data shows that while the total overhead assigned to the lower-volume product is three times the total amount assigned to the higher-volume product, the per unit cost ends up being almost six times more. Estimated overhead expected use of cost = activity- based. Scheduling & travel: , 000 1,680 = per travel hour. Set-up time: ,000 700 = per set-up. Supervision: ,000 ,000 = 14% of direct labour cost. ,500 (c) assuming that the cost drivers are a reasonable representation of what is occurring in the two product lines, it seems appropriate to switch to activity-based costing. By using this system, more accurate cost information is developed which should lead to better allocations of resources and more informative pricing decisions in the future. Problem 5-37a (a) the total manufacturing cost per unit using activity-based costing is as follows: $ 418. 00 (c) management"s future plans for the two television models are not sound.
