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Module 8:
ACTIVITY-BASED COSTING AND SERVICE COST ALLOCATIONS
ANSWER KEY
Problem 1
1. ₱226,666.67
2. ₱136,000
3. ₱150,000
4. ₱111,111.11
5. ₱186,666.67
6. ₱175,000
7. ₱113,333.33
8. ₱68,000
9. ₱75,000
10. ₱ 88,888.89
11. ₱149,333.33
12. ₱140,000
13. ₱49.12
14. ₱48.50
15. ₱48.60
C O P Y R E S T R I C T E D F O R I N S T R U C T O R S O N L Y
S T R I C T L Y C O N F I D E N T I A L
Problem 2
Problem 3
Problem 4
a. Moldings ₱360,000
Machine hours 20,000
Overhead rate ₱18
Assembly 750,000
Labor hours 50,000
Overhead rate ₱15
C O P Y R E S T R I C T E D F O R I N S T R U C T O R S O N L Y
S T R I C T L Y C O N F I D E N T I A L
b.
A B
units produced 80,000 90,000
overhead applied to production
Molding:
₱18 x 5000 ₱90,000
₱18 x 15,000 ₱270,000
Assembly
₱15 x 20,000 ₱300,000
₱15 x 30,000 ₱450,000
Total ₱390,000 ₱720,000
Overhead per Unit ₱4.875 ₱8
Problem 5
a. Assembly ₱216,000
Labor hours 160,000
Overhead rate ₱1.35
Packaging ₱504,000
Machine hours 80,000
Overhead rate ₱6.30
b.
Deluxe Regular
Units 20,000 200,000
Prime costs ₱160,000 ₱1,500,000
Overhead applied to production
Assembly:
1.35 x 10,000 13,500
1.35 x 150,000 202,500
Packaging
6.30 x 8,000 50,400
6.30 x 72,000 453,600
Total ₱223,900 ₱2,156,100
Overhead per Unit ₱11.20 ₱10.78
C O P Y R E S T R I C T E D F O R I N S T R U C T O R S O N L Y
S T R I C T L Y C O N F I D E N T I A L
d.
Deluxe Regular
Units 20,000 200,000
Prime costs ₱160,000 ₱1,500,000
Overhead costs
4 x 20,000 80,000
4 x 160,000 --- 640,000
Total costs ₱240,000 ₱2,140,000
Unit cost ₱12 ₱10.70
e.
f.
Deluxe Regular
Units 20,000 200,000
Prime costs ₱160,000 ₱1,500,000
Overhead costs:
Setting up
₱2,400 x 60 144,000
₱2400 x 40 96,000
Moving materials
₱400 x 180 72,000
₱400 x 120 48,000
Machining
₱2.22 x 10,000 22,200
₱2.22 x 80,000 177,600
Inspecting
₱8.89 x 2000 17,780
₱8.89 x 16,000 142,240
Total costs ₱415,980 ₱1,963,840
Unit cost ₱20.80 ₱9.82
Problem 6
C O P Y R E S T R I C T E D F O R I N S T R U C T O R S O N L Y
S T R I C T L Y C O N F I D E N T I A L
b. Product A Product B
Number of setups 20 ₱600 = ₱12,000 5 ₱600 = ₱3,000
Number of orders 35 ₱80 = 2,800 70 ₱80 = 5,600
Machine hours 1,000 ₱48 = 48,000 1,500 ₱48 = 72,000
Packing orders 75 ₱200 = 15,000 125 ₱200 = 25,000
₱77,800 ₱105,600
C O P Y R E S T R I C T E D F O R I N S T R U C T O R S O N L Y