ABC Ltd has collected the following data for its two activities. It calculates activity cost

ABC Ltd has collected the following data for its two activities. It calculates activity cost

rates

based on cost driver capacity.

Activity Cost driver Capacity Cost

Power Kilowatt hours 50000 hrs Kilowatt Rs 200000

Quality Inspection Numbers of inspection 10000 inspection Rs 300000

The Company makes three products, A, B and C.For the year ended March 31, 2004, the following

consumption of cost drivers was reported:

AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL

Product Kilowatt-hours Quality Inspection

A 20000 7000

B 40000 5000

C 30000 6000

Compute the costs allocated to each product from each activity

Calculate the cost of unused capacity for each activity.

AccountingAnswer :

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