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Annual Cost Driver ...

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Accounting

Annual Cost Driver
Activity Costs Test A Test B Test C Test D Totals
Receive specimen 10000 Number of tests 2000 1500 1000 500 5000
Equipment setup 25000 Minutes per test 5 5 10 10 30
Run test 100000 Minutes per test 1 5 10 20 36
Record results 10000 Minutes per test 2 2 2 4 10
Transmit results 5000 Minutes per test 3 3 3 3 12
Totals 150000
a. Using ABC techniques, determine the allocation rate for each activity.
b. Now, using this allocation rate, estimate the total cost of performing each test.
c. Verify that the total annual costs aggregated from individual test costs equal the total annual costs of the laboratory given in the table below.

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