Assessment Task (Activity Based Costing)
US Bright produces a list of the activities performed at Cravings for cakes and their annual costs. In addition, Bright identifies an activity driver for each activity and the annual quantity of each activity driver. A partial list of activity costs and quantities of activity drivers is shown below:
| Cravings for Cakes list of Activities | |||
| Activity | Activity Cost ($) | Activity Driver | Annual Quantity of Activity driver |
| Prepare Annual Accounts | 5000 | None Available | |
| Process receivables | 15000 | No. of Invoices | 5000 Invoices |
| Process payables | 25000 | No. of purchase orders | 2500 Purchase orders |
| Program production | 28000 | No. of production schedules | 1000 schedules |
| Process Sales order | 40000 | No. of sales orders | 4000 sales orders |
| Dispatch sales order | 30000 | No. of dispatches | 2500 dispatches |
| Develop and test products | 60000 | Assigned directly to products | |
| Load mixers | 14050 | No. of batches | 1000 batches |
| Operate mixers | 45900 | No. of kilograms | 200000 kilograms |
| Clean mixers | 6900 | No. of trays | 1000 batches |
| Move mixture to filling | 3450 | No. of cakes/pastries | 200 000 kilograms |
| Clean trays | 20000 | No. of trays | 16000 trays |
| Fill trays | 16000 | No. of cakes/pastries | 800,000 cakes/pastries |
| Move to baking | 8000 | No. of trays | 16,000 trays |
| Set up ovens | 50000 | No. of batches | 1000 batches |
| Bake Cakes/Pastries | 130000 | No. of batches | 1000 batches |
| Move to packing | 40000 | No. of trays | 16,000 trays |
| Pack cakes/pastries | 80000 | No. of cakes/pastries | 800,000 cakes/pastries |
| Inspect pastries | 2500 | No. of pastries | 50,000 pastries |
Required: Construct an Excel spreadsheet to
- Calculate the cost per unit of activity driver for the activities listed.
- Based on the information in the following table, prepare a bill of activities and determine the cost per unit for Lamington.
- What other costs must be added to calculate the product cost for Lamington?
| Lamington (Batch Size 1000; Annual Volume 100,000) | |
| Activity Consumed | Annual Quantity of Activity Driver |
| Process Receivables | 500 Invoices |
| Process Payables | 200 Purchase Orders |
| Program Production | 100 Production Schedules |
| Process Sales Order | 400 Sales Orders |
| Load Mixers | 100 Batches |
| Operate Mixers | 30 000 Kilograms |
| Clean Mixers | 100 Batches |
| Move mixture to filling | 30 000 Kilograms |
| Clean trays | 2000 trays |
| Fill trays | 100 000 cakes |
| Move to baking | 2000 trays |
| Set up ovens | 100 Batches |
| Bake cakes/pastries | 100 Batches |
| Move to packing | 2000 trays |
| Pack Cakes/Pastries | 100 000 cakes |
| Dispatch Sales Order | 500 Sales orders |
| Develop and Test product | $600 assigned directly to this product |
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