Assume the company decides to use traditional system in which the allocation base of ALL costs is based on cleaning hours. Compute the margin for DNO L
Assume the company decides to use traditional system in which the allocation base of ALL costs is based on cleaning hours. Compute the margin for DNO L
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
MFCB Ltd uses an activity-based costing system for its
Activity Cost Pool | Total Cost (RM) | Total Activity |
Cleaning | 442,068 | 78,800 hours |
Job support | 52,801 | 1,900 jobs |
Client support | 9,170 | 350 clients |
Other | 110,601 | Not applicable |
Total | 614,640 |
The expenses of idle capacity and organization-sustaining expenditures are included in the 'Other' activity cost pool.
One particular client, DNO Ltd, requested 46 jobs during the year that required a total of 92 hours of housecleaning. For this service, the client was charged RM2,230.
TASK:
Assume the company decides to use traditional system in which the allocation base of ALL costs is based on cleaning hours. Compute the margin for DNO LTD.
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