Question 4 (35) Barbacoa AS' Chinese supplier is a traditional manufacturing company that produces and sells two types o

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Question 4 35 Barbacoa As Chinese Supplier Is A Traditional Manufacturing Company That Produces And Sells Two Types O 1 (40.06 KiB) Viewed 32 times

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Question 4 (35) Barbacoa AS' Chinese supplier is a traditional manufacturing company that produces and sells two types of barbeque grills, the coal-driven Baconizer and the gas-driven Taste Master. It is only the latter that is imported to Norway The company has previously used a costing model, where indirect production costs have been allocated to the two products with the help of a distribution rate where production time has been defined as the underlying cost driver. Their newly employed CFO wants to introduce Activity-based costing and has made an analysis of the budgeted indirect production costs for 2022 (all figures in Chinese Yuan): Total activity costs Fixed costs in Activity Available capacity 4000 purchase orders 6200 000 90.00% 800 4 800 000 Procurement Machinery set-up and calibration Production Quality inspections Maintenance of equipment Budgeted capacity Budgeted capacity utilization utilization Baconizer Taste Master 1 800 1400 purchase orders purchase orders 400 300 production lines production lines 8000 10 400 production production hours hours 240 420 inspections inspections 400 540 service jobs service jobs N/A N/A 100.00 production lines 22 000 82.00% production hours 800 inspections 1 200 74.00% service jobs 6400 000 3600 000 8800 3 000 000 8 000 000 Facility costs 34.00 NA Total 32 000 000 The direct production costs per unit are as follows: Baconter Taste Master Direct material 52.00 106.00 Direct labor 104.00 212.00 Packaging 36.00 42.00 Total 192.00 360.00 The planned production and sales in 2022 is: • Baconizer: 120 000 units • Taste Master: 240 000 units Use the template in the Excel spreadsheet to make an ABC-costing model for one unit of Baconizer and one unit of Taste Master, as well as a calculation of the costs for excess capacity in the Production Department.
Activity-based costing model: Calculation of activity rates Variable Procurement Machinery set-up and calibration Production costs Quality inspection Maintenance of equipment Facility costs Fixed per purchase order per production line per production hour per inspection job per service job Product costing: Baconizer Taste Master Direct material Direct labor Packaging Total direct costs per unit 0.00 0.00 Procurement costs, variable Procurement costs, fixed Machinery set up and calibration, variable Machinery set-up and calibration, fixed Production costs, variable Production costs, fixed Quality inspections, variable Quality inspections, fixed Maintenance of equipment, variable Maintenance of equipment, fixed Facility costs, variable Facility costs, fixed Total indirect costs per unit Total ABC-costs per unit 0,00 0,00 0,00 0.00 Costs for excess capacity Procurement Machinery set-up and calibration Production costs Quality inspections Maintenance of equipment Facility costs Total costs for excess capacity Total costs for utlized capacity Total indirect production costs
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