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How we measure the profitable product or product line when Idle Machine & Labor hours are available in Time Driven Activity Based Costing System?

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Question added by Denika Madugalla , Assistant Plant Controller , Camso Loadstar (Pvt) Ltd
Date Posted: 2017/11/13
Joel Mondido
by Joel Mondido , Accountant/Auditor , Joel C. Mondido, CPA

 

The basic approach is to determine the actual costs associated in producing the product (labor, machine, supplies, idle machine and labor hours, taxes, admin support costs and other costs that will form part of the finished product). After getting the total costs, company decision makers will now be able determine the appropriate selling price that would provide a profit. 

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