Topic: Activity Based Costing

Please show all workings.

The company is exploring the use of activity-based costing technique to allocate the nonmanufacturing overhead. The accounts department has gathered the following estimated monthly information: a. Use the activity-based costing method to determine the appropriate values of nonmanufacturing overhead being allocated to the two divisions. If necessary, use reasonable assumptions to determine the appropriate driver for each cost. (5 marks) b. For non-manufacturing cost allocations, there are different methods such as the direct, stepdown and ABC methods mentioned above, explain the rational of the each of the three methods. Which method(s) would you suggest the company to use? Explain your recommendation. (20 marks) c. Design a balanced scorecard for the company. Explain and highlight your key considerations when designing the scorecard and the key performance indicators (with examples of measures in each perspective) for the division. If necessary, you may use any reasonable assumed figures. The company is exploring the use of activity-based costing technique to allocate the nonmanufacturing overhead. The accounts department has gathered the following estimated monthly information: a. Use the activity-based costing method to determine the appropriate values of nonmanufacturing overhead being allocated to the two divisions. If necessary, use reasonable assumptions to determine the appropriate driver for each cost. (5 marks) b. For non-manufacturing cost allocations, there are different methods such as the direct, stepdown and ABC methods mentioned above, explain the rational of the each of the three methods. Which method(s) would you suggest the company to use? Explain your recommendation. (20 marks) c. Design a balanced scorecard for the company. Explain and highlight your key considerations when designing the scorecard and the key performance indicators (with examples of measures in each perspective) for the division. If necessary, you may use any reasonable assumed figures