Classic Pen ABC

ACTIVITY BASED COST MOD Particulars Indirect Labour

Cost driver

Total

Production Run (50%) Setup Time (40%) Part arts Admi dminis nistrat ration (10%) 10%)

10000 8000 2000 2000 20000 40000 16000 8000 2000 2000

Direct Labor Total Labour Expenses Fringe Be Benefits (40 Total Labour Ex Expenses Computer Systems Production Run (80%) Part arts Admi dminis nistrat ration( 20%) 20%) Machinery, Maintenance & Energy Machine Hours Material Cost

14000 50230 Total Ma Total Per Unit 25% Selling

EL FOR CLASSIC PEN COMPANY  Cost per cost drive 66.67 15.21 500

53.33 500

1.4 nufacturing Cost nits Produced ost of Production argin on cost Price per Unit RETURN ON SALE

Blue

Black

Red

Purple

3333.33 3333.33 3041.83 760.46 500 500 10000 8000 16875.16 12593.79 6750.06 5037.52 2666.67 2666.67 500 500

2533.33 3467.68 500 1800 8301.01 3320.41 2026.67 500

800 730.04 500 200 2230.04 892.02 640 500

7000 5600 25000 20000 58791.89 46397.97 50000 40000 1.18 1.16 0.29 0.29 1.47 1.45

1260 4680 20088.09 9000 2.23 0.56 2.79

140 550 4952.05 1000 4.95 1.24 6.19

-44.00%

-200%

21.60%

22.70%

PARTICULARS INDIRECT LABOUR

COST POOL PRODUCTION RUN (50 SET-UP TIME (40%) MAINTAINING RECORDS(

COMPUTER SYSTEM

PRODUTION RUN (80%) PART ADMINISTRATION(

MACHINE,MAINTANENE& ENMACHINE HOURS/UNITS

BUDGETED AMOU

COST DRIVERS

10000 8000 2000

No. of production runs

8000 2000

No. of production run No. of parts administr

150 4

14000

No.of machine hours

10000

No. of set-up times No. of parts administr

BUDGETED VOLUM 150 526 4

RATE 66.66 15.2 500

53.3 500

1.4