Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 43

Haywood Printing is processing a job with the following activity rates:

Activity	Cost Driver	Driver Rate
Direct labor	Number of hours	$ 8
Copying	Number of copies	$0.05

If this job requires five hours for the 1,000 copies, what is the activity-based cost of the job?

Step 1 of 3

Activity Based costing system:

Activity based costing system allocates overhead expenses to the products based on cost objects. This approach is based on concept that every firm’s products and services are a result of series of activities and resources are required to perform these activities. Further, these resources require cost to perform the required activities.