Quail Company has identified the following activities relate

Quail Company has identified the following activities related to indirect production costs: Quail Company has obtained the following data concerning two products: Using activity-based costing, what amount of machine setup cost is assigned to Products 1 and 2? Answer will be shown as Product 1:Product 2 $20,000:$80,000 $2,000:$800 $60,000:$40,000 $71,429:$28,571

Solution

B $2,000 and $800 Statement showing computations Activity Costs a No of drivers b Cost per driver =a/b Machine set up         100,000.00                  500.00                                200.00 Material Handling            25,000.00            15,000.00                                     1.67 Electric Power            35,000.00            10,000.00                                     3.50 Statement showing computations Particulars Product 1 Product 2 No of set ups hours                    10.00                      4.00 Costs per set up hour                  200.00                  200.00 Total Costs of set up              2,000.00                  800.00