A company manufacturing two products furnishes the following data Annual output Product Output units Machine Hours Purchase Orders Machine set-ups A 5000 20000 160 20 B 60000 120000 384 44 Total 65000 140000 544 64 The annual overheads are as under. Rs Volume related activity costs 4,50,000 Set up related costs 9,20,000 Purchase related costs 5,18,000 Total 1,888,000 You are required to calculate the overheads cost per unit of each product A and B based on Activity based costing method.
A company manufacturing two products furnishes the following data Annual output Product Output units Machine Hours Purchase Orders Machine set-ups A 5000 20000 160 20 B 60000 120000 384 44 Total 65000 140000 544 64 The annual overheads are as under. Rs Volume related activity costs 4,50,000 Set up related costs 9,20,000 Purchase related costs 5,18,000 Total 1,888,000 You are required to calculate the overheads cost per unit of each product A and B based on Activity based costing method.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
A company manufacturing two products furnishes the following data Annual output
|
Product |
Output units |
Machine Hours |
Purchase Orders |
Machine set-ups |
|
A |
5000 |
20000 |
160 |
20 |
|
B |
60000 |
120000 |
384 |
44 |
|
Total |
65000 |
140000 |
544 |
64 |
The annual overheads are as under.
|
|
Rs |
|
Volume related activity costs |
4,50,000 |
|
Set up related costs |
9,20,000 |
|
Purchase related costs |
5,18,000 |
|
Total |
1,888,000 |
You are required to calculate the overheads cost per unit of each product A and B based on Activity based costing method.
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