That is, activity cost pool/ Activity driver. The sample calculation of repair and maintenance cost as follow: Assume the repair and maintenance cost for this quarter is $15,000 and the total machine hour of the quarter is 14,000 hours. Therefore, the cost was used around $1.07 per machine hour ($15,000/ 14,000hours). On the other hand, the machine hour of two products - X and Y which are intend to have a comparison by the management of company, was 0.2 and 0.6 hours. It can be allocate the $0.21 and $0.64 of repair and maintenance cost to product X and Y respectively. After allocate all the cost by this method, that is, ABC costing, the real cost was fairly representation to the
That is, activity cost pool/ Activity driver. The sample calculation of repair and maintenance cost as follow: Assume the repair and maintenance cost for this quarter is $15,000 and the total machine hour of the quarter is 14,000 hours. Therefore, the cost was used around $1.07 per machine hour ($15,000/ 14,000hours). On the other hand, the machine hour of two products - X and Y which are intend to have a comparison by the management of company, was 0.2 and 0.6 hours. It can be allocate the $0.21 and $0.64 of repair and maintenance cost to product X and Y respectively. After allocate all the cost by this method, that is, ABC costing, the real cost was fairly representation to the