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A Shoes manufacturing business produces quality customized footwear to client's orders. The units were manufactured as Job #240. It has three production departments A, B and C whose overhead absorption rates are as follows: $190 per labour hour $156 per labour hour C A В $168 per labour hour Direct production costs incurred are: $5000 40 hours @ $90.00 per hour 20 hours @ $70.00 per hour 10 hours @ $50.00 per hour Direct Materials Dept A Dept B Dept C Labour: General administrative expense is 25% of total cost. Profit is to be calculated at 20% mark-up. Required to: A. Calculate the selling price for job #240 В. State ONE (1) advantage and ONE (1) disadvantage of using the ABC approach. С. Outline the FOUR (4) stages of the ABC process

A Shoes manufacturing business produces quality customized footwear to client's orders. The units were manufactured as Job #240. It has three production departments A, B and C whose overhead absorption rates are as follows: $190 per labour hour $156 per labour hour C A В $168 per labour hour Direct production costs incurred are: $5000 40 hours @ $90.00 per hour 20 hours @ $70.00 per hour 10 hours @ $50.00 per hour Direct Materials Dept A Dept B Dept C Labour: General administrative expense is 25% of total cost. Profit is to be calculated at 20% mark-up. Required to: A. Calculate the selling price for job #240 В. State ONE (1) advantage and ONE (1) disadvantage of using the ABC approach. С. Outline the FOUR (4) stages of the ABC process

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 2 A Shoes manufacturing business produces quality customized footwear to client's orders. The units were manufactured as Job #240. It has three production departments A, B and C whose overhead absorption rates are as follows: $190 per labour hour $156 per labour hour C A В $168 per labour hour Direct production costs incurred are: Direct Materials $5000 Dept A Dept B Dept C 40 hours @ $90.00 per hour 20 hours @ $70.00 per hour Labour: 10 hours @ $50.00 per hour General administrative expense is 25% of total cost. Profit is to be calculated at 20% mark-up. Required to: А. Calculate the selling price for job #240 В. State ONE (1) advantage and ONE (1) disadvantage of using the ABC approach. С. Outline the FOUR (4) stages of the ABC process
Transcribed Image Text:Question 2 A Shoes manufacturing business produces quality customized footwear to client's orders. The units were manufactured as Job #240. It has three production departments A, B and C whose overhead absorption rates are as follows: $190 per labour hour $156 per labour hour C A В $168 per labour hour Direct production costs incurred are: Direct Materials $5000 Dept A Dept B Dept C 40 hours @ $90.00 per hour 20 hours @ $70.00 per hour Labour: 10 hours @ $50.00 per hour General administrative expense is 25% of total cost. Profit is to be calculated at 20% mark-up. Required to: А. Calculate the selling price for job #240 В. State ONE (1) advantage and ONE (1) disadvantage of using the ABC approach. С. Outline the FOUR (4) stages of the ABC process
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