A company manufactures three products A, B, and C using the same equipment and processes. Data for the period is given below. A B CProduction (units) 20000 25000 2000Sales price (per unit) $20 $20 $20Material cost per unit $5 $10 $10Labour hours per unit 2 hours 1 hour 1 hourLabour is paid at the rate of $5 per hourOverheads for the period were as follows:Set up costs 90000Receiving 30000Dispatch 15000Machining 55000 $190000Cost driver data: A B CMachine hours per unit 2 2 2Number of set ups 10 13 2Number of deliveries received 10 10 2Number of orders dispatched 20 20 20Required:1.Calculate the cost per unit, absorbing all the overheads on the basis of labour hours. 2. Calculate the cost per unit, absorbing the overheads on the basis of Activity based costing approach.
A company manufactures three products A, B, and C using the same equipment and processes. Data for the period is given below. A B CProduction (units) 20000 25000 2000Sales price (per unit) $20 $20 $20Material cost per unit $5 $10 $10Labour hours per unit 2 hours 1 hour 1 hourLabour is paid at the rate of $5 per hourOverheads for the period were as follows:Set up costs 90000Receiving 30000Dispatch 15000Machining 55000 $190000Cost driver data: A B CMachine hours per unit 2 2 2Number of set ups 10 13 2Number of deliveries received 10 10 2Number of orders dispatched 20 20 20Required:1.Calculate the cost per unit, absorbing all the
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