ABC Ltd makes three products, typically selling 92,500 units of A, 57,250 units of B and 15,125 units of C.

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ABC Ltd makes three products, typically selling 92,500 units of A, 57,250 units of B and 15,125 units of C. Direct materials costs are $30, $40 and $15 for the three products, respectively, and direct labor costs are $20, $30 and $20. Product A requires 30 production run0s, 9,000 machine hours, 12,000 receipts and 50 engineering changes. Product B uses 10 production runs, 12,000 machine hours, 2,000 receipts and 75 engineering changes. Product C requires 60 production runs, 4,000 machine hours, 6,000 receipts and 75 engineering changes. Indirect overhead costs that must be allocated are: Setup $75,000; Depreciation on Machines $1,000,000; Receiving $900,000; and Engineering $750,000. Using ABC, what is the amount of machine depreciation assigned to Product A? 

    • 11 years ago
    ABC Ltd makes three products, typically selling 92,500 units of A, 57,250 units of B and 15,125 units of C.
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