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QUESTION 82. Salomon manufactures and distributes running shoes. To calculat...
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QUESTION 82. Salomon manufactures and distributes running shoes.
To calculate the costs of its products, the company has set up an ABC costing system and has drawn up the following two tables for this purpose. The study that you are being asked to carry out concerns the Genysis model.
Cost driver
|
Total number of cost drivers
|
Number of cost driver units in the Genysis model
|
Number of batches launched
|
277
|
20
|
Number of components
|
200
|
40
|
Number of hours of manufacture
|
10,000
|
2,500
|
Indirect costs concern the following three departments: Purchasing, Production and Administration, each with a number of different activities.
Services
|
Activities
|
Costs
|
Cost drivers
|
Puchasing
|
Supplier referencing
|
$22,500
|
Number of batches launched
|
Placing orders
|
$40,000
|
Number of components
| |
Receiving orders
|
$60,000
|
Number of components
| |
Production
|
Manufacturing
|
$280,000
|
Number of hours of manufacture
|
Handling
|
$12,900
|
Number of batches launched
| |
Maintenance
|
$20,000
|
Number of batches launched
| |
Administration
|
Accounts receivable
|
$13,000
|
Number of orders received and delivered
|
Accounts Payable
|
$13,000
|
Number of components
| |
Inventory management
|
$14,000
|
Number of components
|
How much overhead is allocated to the Genysis model based on the