After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey...

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1.)
Setting Up Machines	Batch Level

Inspecting Components	Unit Level

Providing Utilities	Facility Level

2.) Cost of Job 615

Direct Materials	$2,700.00

Direct labour	$3,100.00

Overhead Costs	$1,550.00
(50% of Direct labour Hr.)

Total Cost	$7,350.00	ANS

3.)

Under Activity Based Costing

Activity		Cost	Driver	Cost per Driver

Setting Up of Machines		$18,040.00	22	$820.00

Inspecting Compnents		$5,100.00	5100	$1.00

Providing utilities		$10,200.00	5100	$2.00


Cost of Job 615

Direct Material				$2,700.00

Direct Labour				$3,100.00

Setting Up Machines
Batches * Cost driver Rate	(4 * 840)			$3,360.00

Inspecting Components
Parts * Cost Driver Rate	(1 * 570)			$570.00

Providing Utilities
Machine Hours * Cost Drver Rate		(660 * 2)		$1,320.00

		TOTAL COST		$11,050.00	ANS

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