CFOS/Overheads/Exercise 4.2 Sample Answers
From WikiEducator
Apportioning the costs of inspection using the ABC method requires the following calculations:
Total Cost of Inspection for a batch of Product X =
- Inspection Hours × Cost per Hour
Unit Cost of Inspection for Product X =
- Total Inspection Cost for Product X
- divided by the Number of Units of Product X in batch
| Kettles – Total Inspection Cost: | 10 hours × £25 per hour = | £ 250.00 |
| Kettle – Inspection Cost per Unit: | £ 250 ÷ 1,000 units = | £ 0.25 |
| Toasters – Total Inspection Cost: | 20 hours × £25 per hour = | £ 500.00 |
| Toaster – Inspection Cost per Unit: | £ 500 ÷ 1,000 units = | £ 0.50 |
Compare these figures with the Answers to Exercise 4.1.
