The Pinewood Furniture Company Pty Ltd plans to manufacture two lines of chairs in the coming year-lounge and patio.The company is considering introducing an activity-based costing system.Given below are each activity,its cost and its related activity driver.The level of activity for the year is:
Under an activity-based costing system,what is the activity cost per unit of activity driver for assembly?

Question

Quizplus · Accepted Answer

To calculate the activity cost per unit of activity driver for assembly, we need to divide the total cost of assembly activity by the total number of direct labour hours. Total cost of assembly activity = $80,000. Total direct labour hours = 8,000. Therefore, activity cost per unit of activity driver for assembly = $80,000/8,000 = $10 per direct labour hour.

The Pinewood Furniture Company Pty Ltd Plans to Manufacture Two