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Activity Based Budgeting Excel Template

Washington Inc. is switching from traditional budgeting to activity-based budgeting. The document provides information on activities from last year, including their actual costs, cost drivers, and expected activity levels. It then shows how Vista Inc. used this information to budget costs for new orders by activity based on cost drivers and expected activity levels. The total budgeted cost is calculated to be $7,657,621.95.

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vicent laurian
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154 views

Activity Based Budgeting Excel Template

Washington Inc. is switching from traditional budgeting to activity-based budgeting. The document provides information on activities from last year, including their actual costs, cost drivers, and expected activity levels. It then shows how Vista Inc. used this information to budget costs for new orders by activity based on cost drivers and expected activity levels. The total budgeted cost is calculated to be $7,657,621.95.

Uploaded by

vicent laurian
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Activity Based Budgeting Excel Template

Prepared by Dheeraj Vaidya, CFA, FRM


dheeraj@wallstreetmojo.com

visit - www.wallstreetmojo.com
Washington Inc. has decided to switch from traditional based budgeting system to activity-based budgeting. Based on
below information you are required to compute budgeted cost based on those drivers.
Activity Last Year Actual Cost
Machine Set-up 400000
Inspection Cost 280000
Number of Machine Setups 700
Inspection Hours 15500
Machine Set-Up Per Unit Cost 571.43
Inspection Cost Per Unit 18.06
budgeting. Based on
Vista Inc was losing the auction due to its higher cost compared to peers. The management then decided to start budgeting
Activity Cost Driver Last Year Cost Cost Driver Cost Driver(B) Expected (C) = (A)/(B)
(A) Activity
Number of
Purchasing 900000 Purchase Orders 41 59 21951.22

1518750 Number of Setups 25 30 60750.00


Production Steps
Inspection 1200000 Inspection hours 150 200 8000.00
Assembling 600000 Assembly hours 400 400 1500.00
Machine
2250000 Machine hours 2500 2600 900.00
Maintenance
TOTAL 6468750

Budgeted
Activity Cost per Driver Total Cost
Overhead Rate
Purchasing 59 21951.219512195 1295121.95
Production Steps 30 60750 1822500.00
Inspection 200 8000 1600000.00
Assembling 400 1500 600000.00
Machine 2600 900 2340000.00
Maintenance
TOTAL 7657621.95
then decided to start budgeting the cost for their new orders by using Activity Based Budgeting.

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