Case: Cost System Considerations for CANADA SNOWCONES LTD.

Table 1 Canada Snowcones Ltd. - Budgeted MOH Costs Activity Budgeted Cost ($000) Driver Budgeted Activity Level Purchasing S 60,000 Purchase Orders 829 Material Handling 71,250 Number of setups 1,766 Mixing 91,500 Mixing hours 920 Chilling S 131,250 Chilling hours 1,856 Packaging S 82,500 Packaging machine hours 1,020 Quality Control 13,500 Number of batches 206 Total MOH costs S 450,000 Table 2 Canada Snowcones Ltd. - Two Product Examples Peanut Butter Bacon Chocolate Direct Material (DM) $ 2.20 per gallon $ 1.90 per gallon Direct Labour (DL) S 1.40 per gallon 1.40 per gallon Budgeted Production and sales 1,500 gallons 80,000 gallons Size of Batch 100 gallons 4,000 gallons Number of setups 3 per batch 3 per batch Size of Purchase Order 40 gallons 500 gallons Time in mixer 0.40 hour per 100 gallons 0.20 hour per 100 gallons Time in chiller 1.50 hour per 100 gallons 1.50 hour per 100 gallons Time in package machine 0.50 hour per 100 gallons 0.25 hour per 100 gallons