1 During the past, the Larry's Lawnmowers Ltd. (LLL) allotted indirect manufacturing costs based on direct work hours. Lately, management features decided to pilot a system of time-driven activity-based costing to allocate these costs. The division makes two lawnmower models: Lo-cost and Deluxe. The following info has been obtained from the company's documents over the past yr:
Direct work hours incurred
Inspections every lawnmower
a couple of
Time for each inspection (hrs. )
Lawnmowers jam-packed and sent per batch
Specific lawnmower packing time (hrs. )
Further preparation period per batch (hrs. )
LLL utilizes 245 personnel to perform indirect labour functions, rotating among machine setups, final home inspections and shipping and delivery. Each staff is paid out $50, 000 per year typically, including rewards. On average, every single employee functions 1, six hundred hours each year.
200 computerized production equipment are rented for $14, 000, 500 in total annually. Each equipment is available to get 1, six-hundred hours per year, including build time. Every machine is placed, no time is necessary to oversee this. Machine-related information for the entire year is as follows:
Machine several hours per lawnmower
Set up time per work (hrs. )
Number of creation runs
a Decide the amount of indirect manufacturing costs allocated to one lawnmower of each and every type (Lo-cost, Deluxe) based upon the existing cost allocation basis (direct work hours).
m Determine the indirect developing support costs for one lawnmower of each type using time-driven activity-based costing. Use the subsequent format. Present supporting computations separately.
1 . Indirect labour
a Machine set up
Total indirect labour
2 . Devices
a Equipment set up
m Machine creation
Total equipment costs...