ABC Ltd has collected the following data for its two activities. It calculates activity cost rates based on cost driver capacity.

Activity Cost driver                                                                  Capacity Cost
Power Kilowatt hours 50000 hrs Kilowatt                                    Rs 200000
Quality Inspection Numbers of inspection 10000 inspection       Rs 300000


The Company makes three products, A, B and C. For the year ended March 31, 2004, the following consumption of cost drivers was reported:

       Product Kilowatt-hours                        Quality Inspection
A.              20000                                                   7000
B.              40000                                                  5000
C.              30000                                                  6000

Compute the costs allocated to each product from each activity
Calculate the cost of unused capacity for each activity.

Answer rating: 100% (QA)

Computation of ABC cost allocation drivers rate a Power Total Overhead costCapacity 2... View the full answer