Product P

Product Q

Product R

Total

1 Production and sales

3,000 units

2,000 units

1,500 units

2 Direct production costs

Direct materials

Direct labour

$ per unit

12

3

15

$ per unit

11

6

17

$ per unit

8

2

10

$70,000

$24,000

$94,000

3 Labour hours per unit

1/2

1

1/3

4 Machine hours per unit

2

1

2

5 Number of production runs

8

2

10

20

6 Number of deliveries to customers

3

2

10

15

7 Number of production orders

30

5

15

50

8 Number of deliveries of materials into

store

17

3

20

40

9 Production overhead costs

Machining

Set-up costs

Materials handling (receiving)

Packing costs (despatch)

Engineering

$

71,500

10,500

35,000

22,500

25,500

165,000

Item

Cost driver

Set-up costs

Production runs

Materials handling

Deliveries of materials

Packing

Deliveries to customers

Engineering

Production orders