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

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 3CE: Lansing. Inc., provided the following data for its two producing departments: Machine hours are used...
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MFCB Ltd uses an activity-based costing system for its overhead costs. The company has provided the following data from its activity-based costing system.

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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