Wilkerson ABC Costs at Actual Volum

Activity Activity Cost Driver Activity Cost Activity Base

Machine Components Machine Hours 336000 11200
Set up Machines Number of Prod Runs 40000 160
Receive ans Schedule Number of Prod Runs 180000 160
Paking and Shipment Number of Shipments 150000 300
Engineering Support Engineering Hours 100000 1250

Cost Allocation
Product wise Activity Base
Volves Pumps Flow Controllers
Machine Components 3750 6250 1200
Set up Machines 10 50 100
Receive ans Schedule 10 50 100
Paking and Shipment 10 70 220
Engineering Support 250 375 625

Cost Calculation
Total Cost
Production (Units) 7500 12500 4000
Direct Material Cost 120000 250000 88000
Direct Labour Cost 75000 156250 40000
Manufecturing Overheads
Machine Components 112500 187500 36000
Set up Machines 2500 12500 25000
Receive ans Schedule 11250 56250 112500
Paking and Shipment 5000 35000 110000
Engineering Support 20000 30000 50000
Total Maufecturing Overhead 151250 321250 333500
Total Cost 346250 727500 461500

Unit Cost
Direct Material Cost 16.00 20.00 22.00
Direct Labour Cost 10.00 12.50 10.00

Machine Components 15.00 15.00 9.00

Set up Machines 0.33 1.00 6.25
Receive ans Schedule 1.50 4.50 28.13
Paking and Shipment 0.67 2.80 27.50
 Engineering Support 2.67 2.40 12.50
Total Maufecturing Overhead 20.17 25.70 83.38
Total Cost 46.17 58.20 115.38
Price 86.00 87.00 105.00
Profit 39.83 28.80 -10.38
Profit Margin 46% 33% -10%

Volves Pumps
Old ABC Old
Direct Material Cost 16.00 16.00 20.00
Direct Labour Cost 10.00 10.00 12.50
Overheads 30.00 37.50
Machine Components 15.00
Set up Machines 0.33
Receive ans Schedule 1.50
Paking and Shipment 0.67
Engineering Support 2.67
Total 56.00 46.17 70.00
ts at Actual Volume
Cost Driver Rate
30
250
1125
500
80

ocation
Allocated Cost
Volves Pumps Flow Controllers Total
112500 187500 36000 336000
2500 12500 25000 40000
11250 56250 112500 180000
5000 35000 110000 150000
20000 30000 50000 100000
151250 321250 333500 806000

458000
271250

336000
40000
180000
150000
100000
806000
1535250
Pumps Flow Controller
ABC Old ABC
20.00 22.00 22.00
12.50 10.00 10.00
30.00
15.00 9.00
1.00 6.25
4.50 28.13
2.80 27.50
2.40 12.50
58.20 62.00 115.38
 Wilkerson ABC Co
Activity Activity Cost Driver Activity Cost
Machine Components Machine Hours 336000
Set up Machines Number of Prod Runs 40000
Receive ans Schedule Number of Prod Runs 180000
Paking and Shipment Number of Shipments 150000
Engineering Support Engineering Hours 100000

Cost A
Product wise Activity Base
Volves Pumps
Machine Components 3750 6250
Set up Machines 10 50
Receive ans Schedule 10 50
Paking and Shipment 10 70
Engineering Support 250 375

Cost Calculation
Total Cost
Volves Pumps
Production (Units) 7500 12500
Direct Material Cost 120000 250000
Direct Labour Cost 75000 156250
Manufecturing Overheads
Machine Components 105000 175000
Set up Machines 2222 11111
Receive ans Schedule 10000 50000
Paking and Shipment 3750 26250
Engineering Support 20000 30000
Total Maufecturing Overhead 140972 292361
Total Cost 335972 698611
Sales 645000 1087500
Profit 309028 388889

Unit Cost
Direct Material Cost 16.00 20.00
Direct Labour Cost 10.00 12.50

Machine Components 14.00 14.00

Set up Machines 0.30 0.89
Receive ans Schedule 1.33 4.00
Paking and Shipment 0.50 2.10
Engineering Support 2.67 2.40
Total Maufecturing Overhead 18.80 23.39
Total Cost 44.80 55.89
Price 86.00 87.00
Profit 41.20 31.11
Profit Margin 48% 36%

Income Statement
Gross Margin
Valves 309028
Pumps 388889
Flow Controllers 3678
701594
Capacity Cost 84344
Total Gross Margin 617250
General, Admin, Selling o\h 559650
Operating Profit 57600
 Wilkerson ABC Costs at Actual Volume
Activity Base Cost Driver Rate
12000 28
180 222
180 1000
400 375
1250 80

Cost Allocation
duct wise Activity Base Allocated Cost
Flow Controllers Unused Capacity Volves Pumps
1200 800 105000 175000
100 20 2222 11111
100 20 10000 50000
220 100 3750 26250
625 0 20000 30000
140972 292361

Calculation
tal Cost
Flow Controllers Total
4000
88000 458000
40000 271250

33600 313600
22222 35556
100000 160000
82500 112500
50000 100000
288322 721656
416322 1450906
420000 2152500
3678 701594

nit Cost
22.00
10.00

8.40
5.56
25.00
20.63
12.50
72.08
104.08
105.00
0.92
1%
Allocated Cost
Flow Controllers unused capacity Total
33600 22400 336000
22222 4444 40000
100000 20000 180000
82500 37500 150000
50000 0 100000
288322 84344 806000