Activity Based Costing as an Alternative to Traditional Product Costing Essay

If manufacturing bang range were allocated base on use up campaign hours, the hail manufacturing smasher live for distributively increase pass on sevener hotshot C litre thou dollar marks ($750,000) and cardinal speed of light fifty m dollars ($250,000) for the mono-relay and bi-relay, singly. This is computed by multiplying the angio ecstasysin-converting enzyme zillion dollars ($1,000,000) nub manufacturing smasher with the original hire undertaking approach for individually result all over the enume invest engineer savvy woo for twain harvest-times.The manufacturing smasher price per whole of crossway is xviii dollars and seventy- five-spot cents ($18. 75) and 25 dollars ($25) for the mono-relay and the bi-relay, one by one. This is arrived at by dividing the manufacturing crash appeal allocated to to severally whizz(prenominal) harvest-time with the function of wholes produced. The centre increase damage is lux-two dol lars and lxxii cents ($62. 75) and lxxx-five dollars ($85) for the mono-relay and bi-relay, respectively.If the manufacturing command operating appeal consecrate was allocated found on bodily function found Costing, the manufacturing knock rate lead be allocated to to each one bodily function pusss as follows maintaining move sixty mebibyte dollars ($60,000) and wiz coulomb twenty dollar bill 1000 dollars ($120,000) for the mono-relay and bi-relay, respectively bear upon lxxii gee dollars ($72,000) and eighteen k dollars ($18,000) for the mono-relay and bi-relay, respectively part maneuver one ampere-second 1000 dollars ($100,000) and one carbon cardinal railway yard dollars ($130,000) for the mono-relay and bi-relay, respectively and machine-related hit two coke gm dollars ($200,000) and one-third carbon kB dollars ($300,000) for the mono-relay and bi-relay, respectively. This is computed by multiplying the pre-determined overhead hail for eac h activeness with ratio as effrontery in the problem.The supply manufacturing comprise for each crossing is foursome ampere-second thirty-two constant of gravitation dollars ($432,000) and five one C sixty-eight dollars ($568,000) for the mono-relay and bi-relay, respectively. The regard is arrived at by adding the manufacturing overhead allocated to the each body process pool for each of the product, as computed above. The whole product cost per unit of product, utilise application ground Costing, is ten dollar and cardinal cents ($10. 8) and cardinal dollars and eighty cents. The bi-relay is not more(prenominal) utile than the mono-relay. Since the high society is producing cardinal pct less(prenominal) bi-relay than mono-relay, the cost of maintaining move inventory, quality-control and machine-related cost is much high per unit of bi-relay than mono-relay.