Malvern ple is considering three projects and has decided to apply ABC analysis to estimate the...

 

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Malvern ple is considering three projects and has decided to apply ABC analysis to estimate the costs of the projects. Additional information relating to the prospective projects is as follows. A. Activities Material handling B. Set-ups Stores Machining Direct materials Direct labour # of orders # of set-ups # of stores requisition # of machine hours Required: The following information was obtained from the company. Project A Project B $25 800 $30 500 Costs (8) 80 000 63 840 71 000 76 000 140 14 120 300 $30 800 $29 500 360 12 300 80 Cost Drivers # of orders # of set-ups #stores requisition # of machine hours Calculate the cost driver rate for each activity. Calculate the total cost of each project using the ABC approach. Project C $32 500 $26 000 250 10 500 16 2.000 21 280 1420 1 000 (8 marks) (17 marks) (Total 25 marks) Malvern ple is considering three projects and has decided to apply ABC analysis to estimate the costs of the projects. Additional information relating to the prospective projects is as follows. A. Activities Material handling B. Set-ups Stores Machining Direct materials Direct labour # of orders # of set-ups # of stores requisition # of machine hours Required: The following information was obtained from the company. Project A Project B $25 800 $30 500 Costs (8) 80 000 63 840 71 000 76 000 140 14 120 300 $30 800 $29 500 360 12 300 80 Cost Drivers # of orders # of set-ups #stores requisition # of machine hours Calculate the cost driver rate for each activity. Calculate the total cost of each project using the ABC approach. Project C $32 500 $26 000 250 10 500 16 2.000 21 280 1420 1 000 (8 marks) (17 marks) (Total 25 marks)

Answer rating: 100% (QA)

A Calculate the cost driver rate for each activity Material handling cost driver rate Cost 80000 Orders 63840 Cost driver rate Cost of orders Cost dri... View the full answer