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    Quality control costs

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    How would one find quality control costs under two different product costing systems?
    If Quality control costs were at 14.5%
    Monthly direct labor costs were $27,500
    And we had ABC information like:
    Activity Cost Pool Cost Driver Pool Rates Quantity of Driver
    Incoming Inspection Type of material $11.50 per 12 types
    In-process inspection Number of units .14 per 17,500 units
    Product certification Per order $77.00 25 orders

    How would I figure the monthly quality costs when I use overhead through the basis of direct labor costs?
    Then what would I do to figure out the quality costs though an ABC system?

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    Solution Summary

    This provides an example of calculating quality control costs through two methods: overhead through basis of direct labor and activity based costing.